The price elasticity of demand for widgets at any particular price is determined by
a. whether widgets are luxuries or necessities.
b. how much of their budgets consumers spend on widgets.
c. whether there are any good substitutes for widgets.
d. All of the above are correct.
d
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A pollution tax internalizes the costs of pollution a firm is imposing on others.
Answer the following statement true (T) or false (F)
The shape of a firm's long-run ________ depends on how costs vary with scale of operations.
A. average cost curve B. variable cost curve C. marginal revenue curve D. fixed cost curve
Refer to Figure 4-3. What area represents producer surplus at the equilibrium price of P1?
A) D + E B) D + E + G + H C) A + B + C + D + E D) A + B + D
A firm is producing a joint product, Product A and Product B, with variable proportions. At its current production levels, the marginal benefit of producing Product A is $10 and the marginal cost is $8 and the marginal benefit of producing Product B is $2 and the marginal cost is $6. To maximize profits, the managers of the firm should produce ________ of Product A and ________ of Product B.
A) more; less B) less; less C) less; more D) more; m