Refer to the graph shown. The economy is in both a short-run and a long-run equilibrium at:
A. point A.
B. point B.
C. point C.
D. no point in the graph.
Answer: D
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Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your total cost (in dollars) is given by the equation TC = 300 + 10Q, where Q represents the number of t-shirts you make. If you make 1,000 t-shirts, your average total cost is ________.
A. $1.03 B. $3 C. $10.30 D. $3.10
Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000 . the firm's marginal cost equals $15 and its average total cost equals $11 . The firm sells its output for $12 per unit. To maximize its profit, the firm should
a. increase its output. b. continue to produce 1,000 units. c. decrease its output, but continue to produce. d. shut down.
Which of the following is the best example of a government effort to address market failure in relation to the FOR WHOM to produce question?
A. Transfer payments. B. The production of goods that allow free riders. C. Antitrust policy. D. Regulations reducing pollution.
Jane is a student at a university. She pays $10,000 per year in tuition, $4,000 per year in living expenses, and $800 per year for books. Were she not in school, she could earn $20,000 per year working as a bookkeeper and she would not live with her parents. What is her economic cost of a year in college?
A. $10,000 B. $13,000 C. $30,800 D. $34,800