A county can add one more ambulance station or resurface three rural roads with the same available funds. Before choosing, an economist would advise the county to compare

A freelance designer turns down a two-hour job that would have paid 90 in order to attend a free workshop. Ignoring other costs and benefits, the opportunity cost of attending is

In one day, Delta can produce either 18 crates of fruit or 9 rolls of fabric. Mesa can produce either 12 crates of fruit or 12 rolls of fabric. Which rate of exchange can benefit both regions when Delta exports fruit?

An economy is producing at a point strictly inside its current production possibilities frontier. If technology and resources are unchanged, the economy can reach the frontier by

Which statement can be evaluated with evidence rather than a value judgment?

The graph shows the current production possibilities for Lakeview. Point U lies inside the frontier, E lies on it, and X lies beyond it.

With resources and technology unchanged, point X is

The labor hours needed to produce one unit are shown below.

Which allocation follows comparative advantage?

Holding technology constant, an economy that shifts resources from current consumption goods toward capital goods will generally

A group of craftspeople can produce more by specializing, yet they continue making most items for themselves. Which change would most directly make specialization and exchange more attractive?

A school rewards perfect attendance with a valuable prize but does not excuse illness. Economic reasoning suggests one possible unintended effect is that

After the price of museum tickets falls, attendance rises. No other determinant of attendance changes. This is best described as

Four potential buyers value one concert poster each at 22, 18, 15, and 11. Four potential sellers have reservation costs of 6, 10, 14, and 19. With one unit per participant, a competitive equilibrium can have

Coffee growers expect the market price of coffee beans to be substantially higher next month, and beans can be stored cheaply. In the current market, this expectation will tend to

The graph shows demand shifting from D_1 to D_2 in the Lakeview market while supply remains fixed.

If the product is a normal good, which change could have caused the shift?

At a regulated price of 9, consumers want 240 units of a medicine and producers offer 170 units. If the price cannot rise, the immediate market condition is

Household incomes rise during an expansion. If train vacations are a normal good, the market for train vacations will experience

Demand is Q_D=100-2P_b and supply is Q_S=10+P_s. A 15 per-unit tax creates the wedge P_b=P_s+15. After the tax, the quantity traded is

Demand for a narrowly defined brand is usually more price elastic than demand for the broad product category because the brand

Demand for copper wiring decreases while a mine closure decreases the supply of copper. Compared with the original equilibrium, which outcome is certain?

The graph shows a per-unit tax in the Lakeview market. Buyers pay P_b, sellers receive P_s, and Q_t is traded after the tax.

Government tax revenue is represented by

In one market, the absolute elasticity of demand is 0.4 and the elasticity of supply is 1.6 near equilibrium. If a small excise tax is introduced, which statement best describes its incidence?

A per-unit subsidy is paid to sellers in a competitive market with ordinary downward-sloping demand and upward-sloping supply. Relative to the unsubsidized equilibrium, the subsidy will normally

For a particular good, income elasticity is -0.7 and cross-price elasticity with good Z is +1.2. The good is best described as

A theater faces the following demand schedule.

Which listed price produces the greatest total revenue?

After a long hike, the first cup of water gives a traveler more satisfaction than the fourth cup. This pattern illustrates

At a consumer's current bundle, the marginal utility per dollar is 9 for fruit, 6 for soup, and 6 for all other purchased goods. To increase total utility without changing total spending, the consumer should initially

The price of a non-Giffen inferior good falls. For the quantity demanded of that good, the substitution effect and income effect

Purchasing conditions remain stable except for the change explicitly stated. Every dollar amount refers to the same purchasing period. A customer making a purchase plan at a repair shop spends an income of 78 on X at 6 per unit and Y at 9 per unit. If income rises by 18 while both prices stay fixed, the maximum attainable quantity of X rises by

A consumer buys only rice and theater tickets. Rice is measured on the horizontal axis. If the price of rice falls while income and the ticket price stay fixed, the budget line

The scenario identifies every change relevant to the requested consumer response. No fact outside the scenario alters the requested comparison. The table gives weekly quantities demanded for a product sold by a repair shop.

If a third consumer demands 2 units at 6 and zero at 8, market quantity demanded at 6 becomes

Which item is an implicit cost to an owner-operated bakery?

Four greenhouse workers produce 74 seedling trays per day. After a fifth worker joins them, daily output rises to 88 trays. The fifth worker's marginal product is

A competitive firm produces 40 units where price equals marginal cost. At that output, average variable cost is 18 and average total cost is 25. If market price is 21, the firm should

A studio pays 420 in fixed cost per day. If daily output increases from 35 projects to 60 projects, average fixed cost falls by

Labor is the only variable input and its wage is constant. When the marginal product of labor rises, the firm's marginal cost of output

A food truck closes for one rainy afternoon and produces no meals. Which cost most clearly remains?

The firm uses the same production method except for the input adjustment described in the question. A bakery can vary labor and capital. At its current output, MP_L=18, the wage is 6, MP_K=28, and the rental price of capital is 14. To lower the cost of producing this output, the firm should

At an output of 70 units, average variable cost is rising and marginal cost is below average total cost. At that output,

A firm can vary labor and machine hours. The marginal product of the last worker is 24 units and the wage is 12; the marginal product of the last machine hour is 30 units and its rental price is 10. To produce the same output at lower cost, the firm should initially use

A firm's cost function is TC=500+12Q+Q^2. What is marginal cost when output increases from 9 units to 10 units?

The demand curve facing one wheat farmer in a perfectly competitive market is horizontal at the market price because

For a competitive firm in the short run, the portion of its marginal-cost curve above minimum average variable cost represents its

At its profit-maximizing output, a price-taking firm reports 2100 in total revenue and 500 in accounting profit. The owner's implicit opportunity cost is 200. The firm's economic profit is

Demand permanently increases in a perfectly competitive constant-cost industry initially in long-run equilibrium. After entry is complete, the industry will have

The graph shows the cost curves of a price-taking Lakeview firm and the market price it faces.

In the short run, the firm should

A single-price seller can sell 8 units at 30 each or 9 units at 28 each. The marginal revenue from the ninth unit is

A monopolist has the following marginal data; fixed cost is unavoidable.

The profit-maximizing output is

A publisher wants to charge different prices for the same digital reference book in two markets. The plan is most likely to succeed when the publisher can

The figures come from a single operating period and should be evaluated using the stated market structure. Fixed commitments cannot be revised during the decision interval. A competitive flower grower faces a market price of 26. Its rising MC equals 26 at 40 units; AVC is 17 and ATC is 22 there. The firm's short-run decision and economic profit are

At the output selected by an unregulated single-price monopolist, price generally exceeds marginal cost. This indicates that

A regulator requires a natural monopoly to charge the price at which its demand curve intersects average total cost. Relative to unregulated monopoly pricing, this policy is intended to

The graph shows demand, marginal revenue, and marginal cost for a single-price monopolist serving Lakeview.

The deadweight loss from monopoly is associated primarily with

The figures come from a single operating period and should be evaluated using the stated market structure. No separate financing or accounting change affects economic profit. In a two-firm cement market, Firm A's best response is Low Price if B chooses High and High Price if B chooses Low. Firm B has the same pattern. Which conclusion follows?

Advertising can improve market performance when it

The firm is choosing an operating plan for one period, with unreported demand and cost conditions fixed. The firm evaluates the immediate consequence before any later adjustment. A fitness studio charges different prices to two identifiable customer groups. Which condition is most necessary for this policy to persist?

The market structure and production conditions remain as described throughout the firm's decision. No separate financing or accounting change affects economic profit. At the allocatively efficient output of a regulated rail network, price is 8, marginal cost is 8, and ATC is 11. At the break-even output, price and ATC are both 10 while marginal cost is 7. Which statement is correct?

Why does an airline in a market with three major carriers monitor a rival's fare change closely?

The entries show profits for Firm L, Firm R.

Firm L's dominant strategy is

Two shops choose whether to open early. If both open early, each earns 30; if neither does, each earns 40. If exactly one opens early, that shop earns 55 and the other earns 35. Which outcomes are Nash equilibria?

Two firms interact indefinitely and can observe past pricing. Compared with a one-period game, cooperation may be easier to sustain because

A stable producers' cartel seeks to raise its members' joint profit by

The firm is choosing an operating plan for one period, with unreported demand and cost conditions fixed. No separate financing or accounting change affects economic profit. Regulators require a natural-monopoly rail network to charge average total cost at its chosen output. Relative to unregulated profit maximization, this policy is intended to

No entry, demand shift, or cost shock occurs beyond the change explicitly stated in the question. The existing plant can produce every quantity under consideration. A representative bookstore earns positive economic profit in a monopolistically competitive market with easy entry. In the long run, entry is expected to

The market structure and production conditions remain as described throughout the firm's decision. Buyers and rival sellers respond only in the ways stated below. Major automobile firms form a cartel, restrict total output, and charge a high price. Once the agreement is in place, an individual member often has an incentive to

A decline in demand for printed newspapers reduces demand for press operators even if operator wages have not changed. This occurs because labor demand is

A competitive orchard sells boxes of fruit for 8. The marginal products of workers 1 through 5 are 18, 15, 12, 9, and 6 boxes per day. If the daily wage is 80, how many workers maximize profit?

Other things equal, a firm's demand for a category of labor will be more wage elastic when

The employer is evaluating one hiring period, with productivity and product-market conditions fixed unless stated otherwise. Each listed worker represents one additional unit of labor. A competitive fruit farm initially sells output for 5. The next worker's marginal product is 18 units and wage is 108, so the worker is not hired. If output price rises to 7 with marginal product unchanged, the firm should

The labor-market data refer to one period and contain every shift relevant to the requested outcome. The comparison excludes any unrelated change in fixed cost. Demand for the service sold by a bakery increases, raising the marginal revenue generated by each unit of output. Holding worker productivity and wages initially fixed, the firm's demand for labor will

Two jobs require the same training and produce the same value, but one involves irregular overnight work and greater injury risk. In a competitive labor market, the risky job will tend to pay more because

A labor-market analyst uses the reported wage, productivity, and revenue information for the decision below. The output created in the period can be sold as described. A new licensing rule reduces the number of qualified workers available to fruit farm employers. In a competitive labor market, with labor demand unchanged, the equilibrium wage and employment will

Residents can enjoy a neighborhood flood-warning siren whether or not they contribute to it. Voluntary private funding may be too low because each resident has an incentive to

A lake is open to many fishing boats, and the fish stock is being depleted. Which policy most directly creates a transferable incentive to conserve the stock?

The graph shows a positive consumption externality in the Lakeview market.

The unregulated market produces

Evaluate the policy or allocation using the stated incentives, without assuming an additional government response. The market participants understand the rule that is actually described. A townwide warning siren can alert one additional resident without reducing protection for others, and residents cannot feasibly be excluded from hearing it. The warning is

The question isolates one source of market failure or distributional change from all other influences. The market participants understand the rule that is actually described. At the efficient output of a paper mill, marginal external damage is 9 per unit. In the standard model, a corrective per-unit tax of

A policy analyst compares private incentives with the relevant social costs and benefits stated below. Effects on people outside the market count only when the scenario identifies them. At two units of a proposed storm-warning program, three residents' marginal benefits are 9, 7, and 5. The marginal cost of the second unit is 18. For that unit, social marginal benefit is

Country J's Lorenz curve lies everywhere closer to the line of equality than Country K's Lorenz curve. Based only on this information,

A competition agency prosecutes rival firms for secretly agreeing on the prices they will quote customers. The challenged behavior is

A means-tested cash benefit is reduced by 80 cents for each additional dollar a recipient earns. One efficiency concern is that the rule