Statistical data provided by the U.S. Department of Transportation shows that the median income of individuals traveling on the nation's bus systems is $18,000 compared to $65,000 for those who normally travel by air. This finding is best explained by which of the following statements?
a. Persons with high income are more likely to fly because the opportunity cost of their time is generally higher than those with lesser income.
b. Traditionally, lower income groups prefer slower methods of transportation.
c. Wealthy individuals own stock in the airlines and, therefore, receive preferential treatment.
d. Low-income groups are generally located near bus stations; wealthy groups congregate around airports.
A
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Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The consumer surplus with the tax is:
A. $166,667. B. $3.56 million. C. $7.11 million. D. $9 million.
The long-run equilibrium condition for firms that operate in perfect competition is
a. P = AVC = MR = MC b. P = ATC = MR = MC c. Q = AVC = MR = MC d. Q = ATC = MR = MC e. TR = ATC = MR = MC
To derive the marginal physical product of capital,
a. all other resources must be held fixed b. capital must be held fixed c. all resources, including capital, must be held fixed d. all resources are variable e. output must be held fixed
____ occur when an X percent increase in input use raises output by more than X percent, so that the more the firm produces, the lower its per-unit costs become
a. Economies of scope b. Scale economies c. Product differentiation d. Perfect competition