A firm produces 2,000 high-quality bicycles per year. At this output, AVC $300 and the firm’s fixed costs are $200,000. The firm’s total costs are
A. $400.
B. $600,000.
C. $800,000.
D. $500,000.
Answer: C
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Protecting intellectual property rights:
A. gives no incentive to innovate. B. encourages research and development. C. will increase total surplus for society. D. only benefits producers in society.
In a typical cartel agreement, the cartel maximizes profit when it: a. behaves as a duopolist
b. is flexible in enforcing production targets. c. behaves as a monopolist. d. behaves as a perfectly competitive firm.
Double coincidence of wants is a situation in which: a. a country exports the good that it can produce at minimum cost
b. a country imports a good that it cannot produce at all. c. two people each want some good or service that the other person is able to provide. d. two people each consume the goods that they can produce themselves.
To offset the effect of households and firms deciding to hold more of their money in checking account deposits and less in currency, the Federal Reserve could
A) raise bank taxes. B) sell Treasury securities. C) raise government spending. D) lower the required reserve ratio.