After Reading a Newspaper Article Announcing Yet Another Hike in Provincial

question 43

Multiple Choice

After reading a newspaper article announcing yet another hike in provincial sales taxes,Adam announces to his wife that it is time to move to a province where the citizens are not continuously being forced to bear the brunt of the increasing costs of social programs.What province would Adam want to move to?

• A) Newfoundland
• B) British Columbia
• C) Quebec
• D) Alberta

Understand the characteristics of perfectly competitive markets and the notion of firms as price takers.

Analyze the conditions under which firms in competitive markets would continue to produce in the short run despite economic losses.

Distinguish between the elasticity of supply curves in the short run and long run in competitive markets.

Recognize the conditions leading to economic profits or losses for firms in competitive markets in the long run.

---

Definitions:

Average Total Cost

This is calculated by dividing the total cost of production by the total number of units produced, showing the average cost per unit.

Marginal Revenue

The additional income received from selling one more unit of a product or service.

Economic Profit

The surplus remaining after accounting for both explicit and implicit costs from total revenues.

Monopolistically Competitive

A market structure in which many companies sell products that are similar but not identical, allowing for competition based on product differentiation.