Diminishing marginal returns imply that marginal cost is falling.
Answer the following statement true (T) or false (F)
False
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If two countries are economically identical except that there is significant air and water pollution in one, then the level of GDP:
A. will be the same in both countries. B. will be higher in the country with no pollution. C. will be greater than the level of economic well-being in each country. D. will be higher in the country with pollution.
Consider the following statements:
a. Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. b. Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment. c. Manufacturers produce less of a particular cell phone when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives? A) a only. B) b only. C) c only. D) a and b. E) a, b, and c.
Graphically, consumer surplus is measured by: a. the area below the demand curve
b. the area below the demand curve, but above the upward-sloping supply curve. c. the area below the demand curve, but above the market price. d. the area below the market demand curve, but above the supply curve.
Suppose an unregulated monopoly faces a negatively-sloped and steep average cost curve. If a second firm enters, what will happen to the first firm's demand and average cost of production?
What will be an ideal response?