1.

2.
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4.
5.
6.
7.
8.
9.
10.
11.

A) Should companies pay for employees health insurance?

B) 4
C) $24
B) $86,000
C) less than double.
A) lower consumer prices on those products or services.
A) Mia has an absolute advantage in producing hair pins but not bandanas.
C) April has a comparative advantage in painting both goods.
C) D2 to D1.
D) there will be an excess supply of the product.
A) The price of apple juice might rise or fall and the quantity of apple juice
falls.
12.
B) The equilibrium price of apple juice rises and the equilibrium quantity of
apple juice might rise or fall.
13.
B) point a to point b.
14. B) inelastic.
15.
A) movie
16. B) Good X is a normal good.
17. B) 5% ****
18. C) $1.20.
19. B) the price a producer receives for a product minus the marginal cost of
production.
20. C) is less than ***
21. B) B.***
22.
B) Triangle A + Rectangle B + Triangle C.
23. *** C) efficient; willingness to pay = marginal cost
24. **** C) 6; 2
25. D) 20 utils.
26. **** B) sunk cost.
27. C) not exist because no input is held constant.
28. ***** A) constant at each output.
29. C) economies of scale.
30.
C) Average total cost will fall.
31.
B) AVC is less than $30.
32. ***** B) increase its current output level.
33. ***** D) decrease; increase
34. ****B) $600.
35. ***** D) $540
36. **** C) $450
37. **** C) $33.33.
38. A) economic profit is zero in the long run.
39. B) are many firms that have slight control over the price they charge for their
product.
40. B) no barriers to entry
41.
B) $10,000.
42.
B) the company will charge more per customer as its average cost increases.
43.
A) 50.
44. B) up; increase
45.
A) Fewer steelworkers will be employed, at a higher wage.