If a firm has increasing returns to scale at all levels of output, the
A. slope of its long-run total cost curve is always negative.
B. slopes of its short-run average cost curves are always negative.
C. slope of its long-run average cost curve is always negative.
D. slope of its production function is always negative.
Answer: C
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Which of the following would most likely decrease the current demand for DVD players?
a. an increase in consumer income b. an increase in the prices of television sets, a complement for DVD players c. an expectation that the price of DVD players would rise sharply in the near future d. an increase in the price of VCRs, a substitute for DVD players
Refer to the information provided in Figure 16.2 below to answer the question(s) that follow.
Figure 16.2Refer to Figure 16.2. To force this firm to produce the ________ level of output, the government should ________ of $10.00 per car.
A. market; issue a subsidy B. market; impose a tax C. efficient; issue a subsidy D. efficient; impose a tax
If Steve's Apple Orchard, Inc is a perfectly competitive firm, the demand for Steve's apples has
A) zero elasticity. B) unitary elasticity. C) elasticity equal to the price of apples. D) infinite elasticity.
Refer to the above figures. An external cost exists. This will lead to a(n)
A) underproduction equal to Q1 minus Q2. B) overproduction equal to Q4 minus Q3. C) underproduction equal to Q4 minus Q3. D) overproduction equal to Q1 minus Q2.