An import quota is an example of
A) a price ceiling.
B) a price floor.
C) a queuing device.
D) a quantity restriction.
Answer: D
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If all resources used in the production of a product are increased by 20% and total output increases by 20%, then the firm must be experiencing
A. diseconomies of scale. B. economies of scale. C. increasing average total costs. D. constant returns to scale.
Four stores have a problem with theft and security is a public good. Let S stand for the number of person-hours of security patrols per week. The marginal benefit of security patrols to each of the stores is given by the formula MB = 200/(1 + S). Patrols cost $25 per hour. If each store provided security independently, how much would each store purchase?
A. 15 person-hours of patrols per week B. 7 person-hours of patrols per week C. 8 person-hours of patrols per week D. 16 person-hours of patrols per week
When a person does not have to pay the full costs for using a scarce resource, then
A) the use of the resource is not affected since society pays for the resource. B) more of the resource will be used. C) the internal costs of using the resource are too high. D) the social costs of the resource are less than they would be if the "correct" amount of the resource were being used.
Economic profits and the performance of stock
A) are independent of each other. B) are negatively related. C) are positively related. D) are positively related only during downturns in the business cycle.