Which of the following best illustrates the concept of derived demand?
a. A decrease in the price of glass causes the demand for plastic to decrease.
b. An increase in the demand for bread leads to an increase in the demand for flour.
c. A decrease in the price of air travel leads to an increase in the quantity demanded of air travel.
d. An increase in the demand for peanut butter leads to an increase in the demand for jelly.
b
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The marginal benefit from buying a particular unit of a good
A) is the amount paid for the unit plus the consumer surplus of the unit. B) increases as market price increases. C) is the difference between the amount paid for the unit and the market price of the unit. D) is the difference between the total benefit of the unit and the marginal cost of producing that unit. E) None of the above answers is correct.
Tanesha sells homemade candles over the Internet. Her annual revenue is $64,000 per year, the explicit costs of her business are $17,000, and the opportunity costs of her business are $22,000. What is her economic profit?
A) $17,000 B) $25,000 C) $42,000 D) $47,000