An example of a positive externality is
A. an apple orchard increasing the number of trees next to a bee farm.
B. pollution.
C. the Clean Air Act.
D. smoking in a crowded place.
Answer: A
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Stockholders receive returns on their financial investment in the form of ________ and ________.
A. coupon payments; capital gains B. interest payments; dividends C. capital gains; interest payments D. capital gains; dividends
Which of the following is true regarding price discrimination?
i. It converts consumer surplus to economic profit. ii. A price discriminator must be a monopoly. iii. To be able to price discriminate, the firm must be able to identify different types of buyers. A) i and ii B) i and iii C) ii and iii D) ii only E) i, ii, and iii
The commodity substitution bias is that consumers substitute high-quality goods for low-quality goods
Indicate whether the statement is true or false
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $8.00; AVC = $5.00; MC = $8.00; MR = $9.00. The firm should
A) decrease output. B) increase output. C) increase price. D) continue to produce its current output.