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
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
The term “born with a silver spoon in his mouth” mistakenly implies A) only monetary endowments allow one to trade with others. B) only the wealthy are strong negotiators in trade. C) endowments are physical. D) endowments differ. ANSWER C
Date: September 9th, 2020
