Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 2, Problem 19SQ
To determine
The principle of
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An economy's production possibilities frontier is fixed in the long run.
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The oversupply of bananas in Mexico, which is recorded in the months of September and October, causes prices to farmers to be reduced by up to 50 percent below the cost of production, said Adrián Prats, president of the banana product system at the national. "It is a critical situation, we are selling the fruit below the cost of production, which is when it really impacts the producer, since he has to continue maintaining his plantations healthy and vigorous and that costs. We have to invest in it, even though the price is not giving to pay, even, the costs", explained Prats. The above causes:
a. By decreasing the price of bananas, marginal income decreases and therefore, production must be increased (T/F) _________
b. By lowering the price, the company will have to take care of its costs. To avoid leaving the market, the producer must ensure that, at least, the average variable costs (T/F) _______ are covered
c. It is recommended that a banana producer who invests in keeping his…
What are ways the profit arises in the changeable/dynamic word ?
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Chapter 2 Solutions
Economics For Today
Ch. 2.6 - Prob. 1YTECh. 2.7 - Prob. 1GECh. 2 - Prob. 1SQPCh. 2 - Prob. 2SQPCh. 2 - Prob. 3SQPCh. 2 - Prob. 4SQPCh. 2 - Prob. 5SQPCh. 2 - Prob. 6SQPCh. 2 - Prob. 7SQPCh. 2 - Prob. 8SQP
Ch. 2 - Prob. 9SQPCh. 2 - Prob. 10SQPCh. 2 - Prob. 11SQPCh. 2 - Prob. 12SQPCh. 2 - Prob. 1SQCh. 2 - Prob. 2SQCh. 2 - Prob. 3SQCh. 2 - Prob. 4SQCh. 2 - Prob. 5SQCh. 2 - Prob. 6SQCh. 2 - Prob. 7SQCh. 2 - Prob. 8SQCh. 2 - Prob. 9SQCh. 2 - Prob. 10SQCh. 2 - Prob. 11SQCh. 2 - Prob. 12SQCh. 2 - Prob. 13SQCh. 2 - Prob. 14SQCh. 2 - Prob. 15SQCh. 2 - Prob. 16SQCh. 2 - Prob. 17SQCh. 2 - Prob. 18SQCh. 2 - Prob. 19SQCh. 2 - Prob. 20SQ
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- 1. In the short run, an increase in output at low levels of production will most likely cause: A. an increase in the marginal cost due to the rising total fixed cost. B. an increase in the marginal cost due to the law of diminishing returns. C. a decrease in the marginal cost due to economies from greater specialization.arrow_forwardTrue or false. In general, production can display diminishing returns in all variables but still display increasing returns to scale. Explain why you think so.arrow_forwardProduction, Entry, and Exit 1. How does the impact of fixed costs change production decisions in the short run and in the long run?arrow_forward
- Hello please answer! What is a good or service that has become expensive/cheap due to (a) natural scarcity/abundance of supply or naturally high/low demand, and (b) artificial mean (e.g., government policy, competition restricting practices)?arrow_forwardIn economics, what is the law of diminishing marginal returns? A. The tendency of firms to minimize production costs B. The observation that as additional units of a variable input are added to fixed inputs, the additional output diminishes C. The relationship between inflation and unemployment D. The impact of government regulation on business operationsarrow_forwardThe optimal level of production is the level that either maximizes profits or minimizes losses. How does one determine the optimal level of production for any business? Explain.arrow_forward
- How are money cost and opportunity cost related to each other? a. Opportunity cost must always exceed money cost. b. They are always identical in any economic system. c. If markets function well, they are closely related. d. In a market economy, they must be equal to each other. e. Money cost is greater than or equal to opportunity cost.arrow_forwardIf a producer is producing at point z and wants to move to point X, then what is the trade-off? How do you find trade-off? 20 gallons of milk 3 lbs of cheese 7 lbs of cheese 10 gallons of milkarrow_forwardThree managers of APISYONADO Company are discussing a possible increase in production who do you think is right? Why? MR.API - we should examine whether our company's productivity galloons of perfume per worker would rise or fall MR.NADO- we should examine whether the extra revenues from selling the additional perfume could be greater or smaller than the extra cost MR. SYO- we should whether our average cost per worker could be rise or fallarrow_forward
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