The short-run average total cost, average variable cost, and marginal cost curves are all U-shaped because of
i. constant total fixed cost.
ii. increasing and then decreasing marginal returns as more labor is hired.
iii. economies and diseconomies of scale as the plant size increases.
A) only i
B) only ii
C) i and iii
D) ii and iii
E) i, ii, and iii
B
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A budget constraint
A) represents the bundles of consumption that make a consumer equally happy. B) reflects the desire by consumers to increase their income. C) refers to the limited amount of income available to consumers to spend on goods and services. D) shows the prices that a consumer chooses to pay for products he consumes.
Slick Shades has a constant marginal cost of production equal to $40 and the distributors have a constant marginal cost of distribution equal to $20. If Slick Shades vertically integrates with the perfectly competitive distributors, the relevant demand curve for the combined firm is the ________ demand curve and the combined firm's marginal cost is equal to ________.
The figure above shows the wholesale demand and marginal revenue curves for Slick Shades Sunglasses, a sunglasses firm with market power. Slick Shades Sunglasses has a constant marginal cost of production and it sells to perfectly competitive independent retail distributors that have a constant marginal cost of distribution.
A) wholesale; $60
B) retail; $40
C) retail; $60
D) wholesale; $40
Successful management of resource wealth is a poverty trap
a. True b. False
Which of the following is true of regulation?
a. Regulatory agencies often ignore the secondary effects of their actions and fail to foresee future problems. b. Policy-makers are hesitant to call for new regulations even when it is clear they would help avert future crises. c. Mortgage lending and banking have historically been unregulated and therefore regulation in these sectors will be unpopular. d. Past regulations have been effective at averting crises, but they are unpopular because they reduce the profitability of the regulated industry.