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
If average cost is decreasing, A) marginal cost equals average cost. B) marginal cost exceeds average cost. C) marginal cost is less than average cost. D) Not enough information is given. ANSWER C
Date: September 9th, 2020
Which of the following is (are) the typical assumption(s) used in the study of mutually beneficial trades? A) Each agent maximizes her utility. B) Agents have convex-shaped indifference curves. C) An agent’s utility is not interdependent of the other agents’ utilities. D) All of the above. ANSWER D
Date: September 9th, 2020
In a two-agent two-good economy, a Pareto-efficient allocation implies that A) no further mutually beneficial trades are possible. B) agents’ indifference curves intersect each other. C) agents’ marginal rate of substitution are different. D) agents’ marginal rate of transformation are different. ANSWER A
Date: September 9th, 2020
Which of the following will cause the marginal 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 million advertising campaign by the American Cancer Society D) All of the above. ANSWER B
Date: September 9th, 2020
If the marginal cost of producing a good is increasing as a firm produces more of the good, then which of the following must be TRUE? A) AFC is rising. B) AVC is rising. C) MC > AVC. D) MPL is falling. ANSWER D
Date: September 9th, 2020
