A firm's short-run supply curve is the firm's marginal cost above:
A. the shut-down point.
B. the zero-profit point.
C. zero
D. the point of diminishing returns.
Answer: A
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A firm using a two-part tariff can produce the economically efficient outcome by
A) making the fixed-fee portion of the price as low as possible. B) setting the fixed-fee portion of the price at some proportion to the fixed cost of production. C) setting the per-unit portion of the price equal to the average cost of production. D) setting the per-unit portion of the price equal to the marginal cost of production.
How does an increase in the real exchange rate affect exports and imports?
A) Exports increase; imports decrease. B) Exports decrease; imports increase. C) Exports increase; imports change ambiguously. D) Exports change ambiguously; imports decrease. E) Exports increase; imports are constant.
A firm uses workers and seed to grow lettuce. Its lettuce output rises from 100 tons to 200 tons when the number of workers increases from 25 to 75. Its production process shows
A. decreasing returns to scale. B. diminishing returns to labor. C. increasing long-run average cost. D. decreasing short-run average variable cost.
A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
If the market price of grills is $300, given the scenario described, the total consumer surplus would be: A. $1,070. B. $170. C. $200. D. None of these is true.