There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell.
What is the vertical intercept of the village's demand curve for fireworks?
A. 25
B. 1,000
C. 50
D. 10
Answer: B
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According to the law of diminishing returns
A) the total product of an input will eventually be negative. B) the total product of an input will eventually decline. C) the marginal product of an input will eventually be negative. D) the marginal product of an input will eventually decline. E) none of the above
The imposition of a per-unit tax on polluting firms will result in the socially efficient level of production only if the tax equals:
a. the marginal social cost plus the marginal private cost. b. the marginal social cost plus the marginal external cost. c. the marginal social cost minus the marginal private cost. d. the average total cost minus the average variable cost.
Unlike a perfectly competitive firm, a monopolist
A. can choose how much output to produce. B. cannot increase production without affecting the price he or she receives for his or her good. C. usually sells in a market with a downward-sloping demand curve. D. has an MR from increasing output by one unit equal to the price of his or her product.
The cost disease of the service sector in recent years is the result of
A. market failure. B. government intervention. C. collective bargaining by unions. D. uneven productivity growth.