One way for the government to eliminate a negative externality is to A) charge an emissions fee. B) set an emissions standard. C) levy an effluent charge. D) All of the above. ANSWER D
Date: September 9th, 2020
If the demand elasticity for a product is -2, and a profit-maximizing firm sells the product for $10, its marginal cost must be A) $5. B) $10. C) $15. D) $8. ANSWER A
Date: September 9th, 2020
Consider two Cournot competitors selling complementary goods with demand curves given by: p1 = 100 – q1 + .5q2 p2 = 100 – q2 + .5q1 Suppose each firm has a marginal and average cost of $10. a. What about the demand equations indicate that these goods are complements? How do they differ from the […]
Date: September 9th, 2020
When the government charges an output tax to eliminate an externality, it forces the manufacturer to ________ the negative externality. A) charge customers for B) internalize C) stop producing D) increase the production of ANSWER B
Date: September 9th, 2020
Among the advantages of the least-squares trend analysis techniques is A) the ease of calculation. B) relatively little analytical skill required. C) its ability to provide information regarding the statistical significance of the results. D) All of the above ANSWER D
Date: September 9th, 2020
When mark-up equals 50% and AC = MC, then demand elasticity will be A) -1. B) -1.5. C) -2. D) -3. ANSWER D
Date: September 9th, 2020
The socially optimal amount of pollution is A) zero. B) greater than zero. C) indeterminant. D) unattainable. ANSWER B
Date: September 9th, 2020
The forecasting method that involves using an average of past observations to predict the future (if the forecaster feels that the future is a reflection of some average of past results) is the A) moving average method. B) econometric forecasting method. C) exponential smoothing method. D) Both A and B E) Both A and C […]
Date: September 9th, 2020
Which of the following is the exponential trend equation to forecast sales (S)? A) S = a + b(t) B) S = a + bt C) S = a + b(t) + c(t)2 D) None of the above ANSWER B
Date: September 9th, 2020
If the average cost curve for an individual firm is decreasing when it intersects the market demand curve, why is a natural monopoly likely to develop in this market? Explain. What will be an ideal response? ANSWER Perfect competition leads to firms increasing size until reaching the minimum of the AC curve. If firms […]
Date: September 9th, 2020
