"The principle of increasing marginal cost does not apply to public goods." Is this statement correct or not?
What will be an ideal response?
The statement is false. For both public goods and private goods, the marginal cost increases as more of the good is produced.
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A newspaper reports that the average price of new homes in a certain city had decreased, and the number of new homes sold had also decreased. This situation is probably caused by
A. higher government subsidies to new homebuyers in that city. B. a rising population in that city. C. decreasing incomes of people in that city. D. decreasing costs of construction materials and services in that city.
If a perfectly competitive firm is currently producing where P = MC and MC = ATC, then the firm will earn ________ profits.
A) positive B) zero C) negative D) above normal
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.
If the demand curve for a firm's output is P=100-5Q, the marginal revenue curve will be
A. MR=20-5Q. B. MR=100-5Q. C. MR=100-10Q. D. MR=20-Q.