A consumer purchases a book by driving across town to a bookstore, standing in line for five minutes to pay the cashier, and then pays $5
The same book is purchased by another consumer who spends 2 minutes placing the order over the internet for $10. The book necessarily cost the first consumer less. Indicate whether the statement is true or false
False. The opportunity cost of driving across town and standing in line may have raised the total cost of the book to the first consumer to more than $10.
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In the mid-1980s, the salaries of accounting professors with Ph.D.s increased dramatically. This resulted in an increase in enrollments in Ph.D. accounting programs
Since a Ph.D. degree in accounting may take at least four years to complete, the short-run elasticity of supply of accounting professors is A) greater than the long-run-elasticity of supply. B) less than the long-run elasticity of supply. C) equal to the long-run elasticity of supply. D) equal to the short-run elasticity of demand.
A competitive firm has been selling its output for $20 per unit and has been maximizing its profit, which is positive. Then, the price falls to $18, and the firm makes whatever adjustments are necessary to maximize its profit at the now-lower price. Once the firm has adjusted, its
a. quantity of output is lower than it was previously. b. average total cost is lower than it was previously. c. marginal cost is higher than it was previously. d. All of the above are correct.