Michelle can produce 20 dozen cookies and 5 cakes in one day. Robert can produce 5 dozen cookies and 5 cakes in one day. Who should specialize in cakes and who should specialize in cookies?

Robert should specialize in cake and cookies.

Neither Michelle nor Robert should specialize.

Michelle should specialize in cakes and cookies.

Michelle should specialize in cakes and Robert in cookies.

Robert should specialize in cakes and Michelle in cookies.

What is true of a firm's production if it operates in a perfectly competitive market with short-run economic profits?

Marginal revenue = demand = marginal cost > average total cost

Marginal revenue = marginal cost = average fixed cost

Average total cost = price = average variable cost

Marginal cost < Marginal revenue

Price = marginal cost = average total cost

If a firm has a fixed accounting cost of $20,000, total explicit costs amounting to $100,000, and total revenue of $100,000, what economic profit is it earning?

Normal

Zero

$20,000

$80,000

Indeterminate

Why might salt be a resource with a high cost in one market and a very low cost in another market?

Trade could affect costs.

Its supply could be scarce in one market and very great in another.

The higher cost market might have a much lower demand for salt than its supply.

The higher cost market might have no demand for salt.

The lower cost market might have more trade-offs for salt harvesting.

What is the intended effect of a country imposing an import tariff on a good?

Decreasing domestic production

Increasing foreign trade

Increasing domestic production

Improving the quality of foreign trade

Decreasing prices for transport