A windfall profit tax imposed on oil companies would shift the firms’ A) marginal tax rate. B) marginal cost curve. C) average cost curve. D) production function. ANSWER C
Date: September 9th, 2020
Any competitive equilibrium is Pareto efficient because, with a competitive equilibrium, A) the marginal rates of substitution are equal for all consumers. B) the price line is the contract curve. C) mutual gains from trade exist. D) the slope of the price line equals the ratio of the MRS for all consumers. ANSWER A […]
Date: September 9th, 2020
In a competitive market, prices adjust until all consumers find themselves A) maximizing utility. B) on the contract curve. C) happy with their original endowment. D) with many opportunities to gain from additional exchange. ANSWER B
Date: September 9th, 2020
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
A firm’s cost curve is determined by A) congressional laws. B) whether the firm hires engineers or not. C) natural laws. D) the firm’s production function. ANSWER D
Date: September 9th, 2020
If average cost is positive, A) marginal cost equals average cost. B) marginal cost exceeds average cost. C) marginal cost is less average cost. D) Not enough information is given. ANSWER D
Date: September 9th, 2020
When two people trade their initial endowments to a point on the contract curve, only the level of the endowments will determine the new allocation. Indicate whether the statement is true or false ANSWER False. The respective bargaining abilities will also play a role in determining the final allocation.
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
