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If the firms want to sell at least 24,000 pounds then they need to charge at least $3. 

If the price was $2 then the total demand would be 40,000 pounds.

There is no demand if the price is set above $7.20.

The demand curve suggests that to double the amount sold, the price needs to be halved.

The total cost curve is an upward-sloping straight line through the origin.

The marginal cost curve intersects the average cost curve at its minimum point.

The marginal cost curve is a horizontal straight line.

It is possible for the firm to make positive profits by charging a price of $1.50.

The elasticity of demand is approximately 1.25.

The shop should raise its price in order to increase profits.

The demand for the hampers is elastic.

The average cost is C.

This firm’s marginal cost is lower than its average cost at all Q.

The marginal cost is F/Q + C.

Maria’s employment rent if she can get another job with the same wage rate after 44 weeks of being unemployed is more than $6,160.

The employment rent per hour is $3.

Maria’s employment rent if she can only get a job at the same wage rate after 44 weeks of being unemployed is less than $7,700.

The employment rent will fall unless the firm raises the wage.

A worker’s effort increases because the employment rent increases.

Effort decreases because the disutility of effort decreases.

It equals the wage you receive in your employment.

Higher employment rents make workers less likely to quit their job.

They are the costs you have to pay for your employment.

Higher employment rents make workers more likely to quit their job.

The no-shirking wage will be higher than the

worker’s productivity.

Employers must set wages equal to workers’

reservation wages to cover the cost of work effort.

The employer has to choose the highest wage that

gives an employee an incentive to work hard.

Paying above the worker’s reservation wage results

in employment rent.