Which of the following will cause the average fixed cost curve of making cigarettes to shift? A) a $5 million penalty charged to each cigarette maker B) a $1 per pack tax on cigarettes C) a $3 per hour wage increase D) an increase in the demand for cigarettes ANSWER A
Date: September 9th, 2020
The fact that any Pareto-efficient equilibrium can be achieved through competition by adjusting endowments is called A) the Second Welfare Theorem. B) the First Welfare Theorem. C) the Third Welfare Theorem. D) That is not possible. ANSWER A
Date: September 9th, 2020
A government policy of providing free public K-12 education is most consistent with A) Pareto-efficiency. B) the First Theorem of Welfare Economics. C) the Second Theorem of Welfare Economics. D) the contract curve. ANSWER C
Date: September 9th, 2020
Assume Congress decides that Social Security taxes must increase in order to fund the system. This would A) shift up the marginal cost curve for any firms that hire labor. B) guarantee a decrease in profits. C) shift up the average fixed cost curve for any firms that hire labor. D) guarantee an increase in […]
Date: September 9th, 2020
In the short run, marginal cost is minimized when A) MPL is maximized. B) MPL equals zero. C) APL is maximized. D) APL equals zero. ANSWER A
Date: September 9th, 2020
Assume Congress decides that oil companies are making too much profit and decides to tax oil companies for each gallon of gasoline produced. This would A) shift the marginal cost curve up. B) shift the marginal cost curve down. C) shift the average fixed cost curve up. D) shift the average fixed cost curve down. […]
Date: September 9th, 2020
A specific tax of $1 per unit of output will affect a firm’s A) average total cost, average variable cost, average fixed cost, and marginal cost. B) average total cost, average variable cost, and average fixed cost. C) average total cost, average variable cost, and marginal cost. D) marginal cost only. ANSWER C
Date: September 9th, 2020
For a given set of prices, two consumers choose bundles that are off the contract curve. In a competitive market, A) prices will adjust until the consumers choose bundles that are on the contract curve. B) the indifference curves will shift back to the contract curve. C) the contract curve will shift to connect these […]
Date: September 9th, 2020
Which of the following will cause the average cost curve of making cigarettes to shift? A) a $5 million penalty charged to each cigarette maker B) a $1 per pack tax on cigarettes C) a $1 an hour wage increase paid to all cigarette production workers D) All of the above. ANSWER D
Date: September 9th, 2020
Suppose two people start with an initial endowment and trade until they obtain a Pareto-efficient allocation with the corresponding price line. What happens when more people who have the same tastes and endowments as the original two traders are included in the Edgeworth box analysis? A) The price line does not change. B) The price […]
Date: September 9th, 2020
