The graph shown exhibits diseconomies of scale:
A. in region a.
B. in region c.
C. over the entire range of output.
D. in region b.
Answer: B
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Which of the following statements is true about optimal two-part tariff and perfect price discrimination for a given demand curve?
A) The total revenue received under an optimal two-part tariff could be greater than, less than, or equal to that received under perfect price discrimination, depending on the fixed-fee portion of the two-part tariff. B) The total revenue received under the two pricing schedules is the same. C) The total revenue received under an optimal two-part tariff is less than that received under perfect price discrimination. D) The total revenue received under an optimal two-part tariff exceeds that received under perfect price discrimination.
You purchase a pizza oven that is expected to last 10 years for $15,000. How do you account for the economic cost of the oven?
A) Expense the oven, taking a write-off for the entire price in the first year. B) Amortize the cost over the 10 year life of the oven, resulting in a cost of $1,500 per year. C) Calculate the value of renting the oven to someone else and use that as your cost. D) The cost is the price of the oven minus any revenue made selling pizzas made in the oven.
If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must
A) be using resources inefficiently today, but will be more efficient in the future.
B) be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods.
C) must be producing outside the production possibilities frontier and will continue to do so in the future.
D) must not have private ownership of property and will have to follow planning authorities' decisions today and in the future.
A decrease in the prices of two products that a consumer buys out of a constant budget would cause the consumer's:
A. Indifference curves to shift outward from the origin B. Indifference curves to shift inward to the origin C. Budget line to shift outward from the origin D. Budget line to shift inward to the origin