A deadweight loss occurs ________ in a market.
A. when there is efficient production
B. only when there is overproduction
C. when there is underproduction or overproduction
D. only when there is underproduction
Answer: C
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All of the following help define market structure, except one. Which is the exception?
a. number of sellers b. barriers to entry c. barriers to exit d. standardization of product e. how firms are organized (i.e., as proprietorships, partnerships, or corporations)
Which of the following estimates how quickly an economy grows?
a. An isoquant curve b. An aggregate production function c. The rule of 70 d. The rule of law
Assume that in the short run a firm is producing 100 units of output, has average total costs of $100, and average variable costs of $50. The firm's total fixed costs are
A) $50. B) $5,000. C) $150. D) $15,000.
Oftentimes, the socially optimal quantity for a product that imposes external costs on the society is not zero, but something greater than zero. This is because completely eliminating the externality would involve:
A. A much greater marginal benefit than marginal cost B. A much greater marginal cost than marginal benefit C. Having shortages in the market D. Having surpluses in the market