October 6, 2020
###### Individual Project for EXPERT PROF MB ONLY
October 6, 2020

1. The​ short-run supply curve is the

A.

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marginal cost curve above the​ break-even price.

B.

average variable cost curve above the​ shut-down price.

C.

marginal cost curve above the​ shut-down price.

D.

average variable cost curve above the​ break-even price.

2. As the total output of an​ increasing-cost industry​ increases, the average cost of production: A. Increases or B. Decreases, because input prices: A. Increase or B. Decreases, and the productivity of inputs used by firms: A. Increases or B.Decreases

3.Sugar Import Ban. The sugar industry is another example of an​ increasing-cost industry. If the price of sugar is only 11 cents per​ pound, sugar production is profitable in areas with relatively low production​ costs, including the​ Caribbean, Latin​ America, Australia, and South Africa. At a price of 11​ cents, the world supply of sugar equals the amount produced in these areas. As the price​ increases, sugar production becomes profitable in areas where production costs are​ higher, and as these areas enter the world​ market, the quantity of sugar supplied increases. For​ example, at a price of 14 cents per​ pound, sugar production is profitable in some countries in the European Union too. At a price of 24​ cents, production is profitable even in the United States.

a. If the world price is 13 cents per​ pound, what areas of the world supply sugar to the world market and the United​ States?

A.

The​ Caribbean, Latin​ America, Australia, South​ Africa, and some countries in the EU.

B.

The​ Caribbean, Latin​ America, Australia, South​ Africa, and the U.S.

C.

The Caribbean and Latin America.

D.

The​ Caribbean, Latin​ America, Australia, and South Africa.

b. Suppose the United States bans sugar imports. You predict that the new price of sugar in the U.S. will be at least

​\$nothing

.

​(Enter your response to two decimal​ places.)

4. An increase in demand causes a large initial upward: A.Jump or B. Slide, in​ price, followed by a downward: A.Jump or B.Slide to the new​ long-run equilibrium price.