A rightward shift in the supply curve is called:
a. a decrease in supply.
b. an increase in consumption.
c. an increase in supply.
d. an decrease in income.
c
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Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units
A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. B) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low. C) producers should lower the price to $1 in order to sell the quantity demanded of 10,000. D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
Adam spent $10,000 on new equipment for his small business, "Adam's Fitness Studio." Membership at his fitness center is very low and at this rate, Adam needs an additional $12,000 per year to keep his studio open. Which of the following is true?
A) The fixed cost of running the studio is $22,000. B) The variable cost of running the studio is $22,000. C) The $10,000 Adam spent on equipment is a fixed cost of business and the $12,000 he'll need to continue operations is a variable cost. D) The $10,000 Adam spent on equipment is the total cost of starting the business and the $12,000 he'll need to continue operations is a marginal cost.