Variable costs are A) a production expense that does not vary with output. B) a production expense that changes with the quantity of output produced. C) equal to total cost divided by the units of output produced. D) the amount by which a firm’s cost changes if the firm produces one more unit of output. […]
Date: September 9th, 2020
Gains from trade will be possible as long as A) people have different endowments. B) people place different values on some goods. C) marginal rates of substitution are equal across individuals. D) excess supply equals excess demand. ANSWER B
Date: September 9th, 2020
Suppose the total cost of producing T-shirts can be represented as TC = 50 + 2q. Which of the following statements is TRUE at all levels of production? A) MC = AVC B) MC = AC C) MC > AFC D) All of the above. ANSWER A
Date: September 9th, 2020
Gains from trade will be possible as long as A) levels of utility differ. B) utility functions differ. C) marginal rates of substitution differ. D) endowments differ. ANSWER C
Date: September 9th, 2020
Gains from trade can only occur when A) marginal rates of substitutions differ across people. B) marginal rates of substitution are equal across people. C) indifference curves are convex. D) people find themselves on the contract curve. ANSWER A
Date: September 9th, 2020
If only two people are trading their endowments and no production is possible, then the equilibrium they reach will A) be on their contract curve. B) result in unequal marginal rates of substitution for the two people. C) result in one person being worse off than with his or her endowment. D) All of the […]
Date: September 9th, 2020
When two people are on the contract curve, the allocation of goods A) cannot be improved. B) is Pareto efficient. C) is such that neither individual can be made better off without making the other worse off. D) All of the above. ANSWER D
Date: September 9th, 2020
Assume Congress holds a hearing on the impact of gasoline prices on the price of corn. Most likely, this hearing will be A) a partial equilibrium analysis. B) a general equilibrium analysis. C) about consumer rather than producer surplus. D) an analysis of efficiency. ANSWER A
Date: September 9th, 2020
Your company makes copper pipes. Over the years, you have collected a large inventory of raw copper. The production process involves melting the copper and shaping it into pipes. You also have a large stockpile of pennies. Suppose the price of copper rises so much that the copper in the penny becomes worth more than […]
Date: September 9th, 2020
Why might a police officer not pull over someone speeding two miles over the speed limit? A) The explicit costs of stopping the driver over are too high. B) The opportunity costs of stopping the driver are too high. C) The opportunity costs of topping he driver are too low. D) The explicit costs of […]
Date: September 9th, 2020
