The short-run supply curve for a perfectly competitive firm is
A) the industry supply curve.
B) its rising portion of the average-variable-cost curve.
C) its entire marginal-cost curve.
D) its marginal-cost curve above the average-variable-cost curve.
E) its average-revenue curve.
Ans: D) its marginal-cost curve above the average-variable-cost curve.
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If city officials expect that an increase in bus fares will raise mass transit revenues, they must think that the demand for bus travel is
a. elastic b. unit elastic c. inelastic d. perfectly inelastic e. -10
By providing free garbage removal, a community
A. discourages activities that produce detrimental externalities. B. disincentivizes citizens from recycling. C. leads citizens to throw out less garbage than is socially optimal. D. raises the opportunity cost of recycling.
According to dynamic tax analysis, continually increasing the tax rate will eventually
A) cause an increase in the tax base. B) have no impact on the tax base. C) cause a decrease in the tax base. D) result in an initial decrease in the tax base followed ultimately by a rise in the tax base.
If 40 Russian rubles = $1 U.S.,
A. 1 ruble = $.025 B. 1 U.S. cent = 4 rubles C. 40 U.S. cents = 100 rubles D. $4 = 120 rubles