Diminishing marginal product:
A. causes the variable cost curve to become flatter.
B. causes the fixed cost curve to become flatter.
C. causes the variable cost curve to become steeper.
D. has no relation to the variable cost curve.
Answer: C
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According to the above table, there is an excess quantity demanded of 1500 DVDs at the price
A) $14. B) $12. C) $10. D) $8.
The deadweight loss from a tax
a. does not vary in amount when the price elasticity of demand changes. b. does not vary in amount when the amount of the tax per unit changes. c. is larger, the larger is the amount of the tax per unit. d. is smaller, the larger is the amount of the tax per unit.
Transfer payments are:
a. cash given by firms to shareholders. b. a major source of income for the labor force. c. cash transfers like welfare benefits and social security. d. not a significant part of public policy.
In the long run in a perfectly competitive market:
A. firms earn positive economic profits. B. firms operate at an efficient scale. C. supply is perfectly inelastic when all firms have the same cost structure. D. All of these are true.