Refer to the information provided in Figure 10.2 below to answer the question(s) that follow. 
Figure 10.2 Refer to Figure 10.2. This firm?s marginal cost curve has shifted from MC1 to MC0 A profit-maximizing firm should ________ the amount of output produced and ________ its demand for labor.
A. increase; decrease
B. keep constant; increase
C. decrease; decrease
D. increase; increase
Answer: C
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In order to regulate a monopoly's price the government
A) needs to hire former executives from the monopoly. B) should rely on industry experts for information. C) needs accurate information on the monopoly's demand and cost curves. D) needs to know the monopoly's supply curve.
When a positive externality is present in a market, total surplus is:
A. higher when buyers receive a Pigouvian subsidy for the externality. B. lower when buyers receive a Pigouvian subsidy for the externality. C. higher when buyers only consider private benefits. D. Any of these statements could be true.
Marginal cost is defined as:
A. total variable cost resulting from a one-unit increase in quantity. B. quantity resulting from a one-unit increase in total variable cost. C. the change in total cost resulting from a one-unit increase in the change in quantity. D. the change in quantity resulting from a one-unit increase in the change in total variable cost.
The slope of a production possibilities frontier measures:
A. inefficient production of a good. B. the trade-off in the consumption of one good versus the other good C. how much of the resources must be used in order to produce one the goods. D. the opportunity cost of producing one good in terms of the other good.