For a monopolist, if total revenue increases as output decreases, then marginal revenue is
A. equal to price.
B. negative.
C. positive.
D. zero.
Answer: B
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The inefficiency created by income taxation occurs due to
A) the cost of collecting taxes and making welfare payments. B) motivating welfare recipients to work less. C) motivating income earners to work less. D) All of the above answers are correct.
The long run average cost curve may initially slope downward due to
A) decreasing average fixed costs. B) increasing marginal returns. C) economies of scale. D) All of the above.
Figure 3.6 illustrates a set of supply and demand curves for hamburgers. An increase in supply and an increase in demand are represented by a movement from:
A. point d to point b. B. point d to point a. C. point c to point a. D. point b to point c.
When negative externalities exist, the private market equilibrium represents a
A) market price which is too low and a market quantity which is too low. B) market price which is too low and a market quantity which is too high. C) market price which is too high and a market quantity which is too low. D) market price which is too high and a market quantity which is too high.