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
Suppose each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the short run, an increase in the price of shovels will result in A) fewer shovels being purchased. B) more workers being hired. C) a decrease in the firm’s output. D) no change in the firm’s […]
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
