When resource markets are free to adjust, temporary differentials will cause
a. b, c, and e to occur
b. the allocation of fewer resources to lower-paid uses
c. the equalization of payments for the same resource in different uses
d. no change in the allocation of resources
e. the allocation of more resources to higher-paid uses
A
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Theory in economics
a. involves some simplification of reality b. bears no relation to reality c. approaches reality in all its complexity d. involves so much distortion of reality that it is worthless e. focuses on the unique aspects of each situation
Refer to the information below. If the firms' managers form a price -fixing cartel that maximizes the firms' total profit, what is the total quantity produced by all firms?
A small nation has three gasoline suppliers with a linear monthly market demand equal to: Q = 500,000 - 5P. Each firm's marginal cost (MC) and average total cost (ATC) curves are horizontal at $10,000 per month. A) 450,000 B) 22,000 C) 225,000 D) 45,000