Suppose that firms are located in a circle on an island. You are given transportation costs, fixed costs, variable costs, and demand (assume that customers are spread evenly along the circle). In an example of restaurant location on an island, if the number of people on the island doubled, the number of restaurants
A. would halve.
B. would stay the same.
C. would double.
D. would increase by a factor of 
.
Answer: D
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An oligopoly created because of economies of scale is called a
A) natural oligopoly. B) legal oligopoly. C) public oligopoly. D) monopolistic oligopoly. E) scale oligopoly.
Marginal resource cost is defined as the
a. total cost of producing a unit b. total cost of adding one more unit of a resource, other things constant c. cost of adding one more unit of a resource, other things constant d. marginal cost divided by the quantity of a resource e. price of labor
Which statement is true?
A. Compared with citizens of other industrialized countries, Americans are not as heavily taxed. B. Public goods are usually not provided by private enterprise because they would not be profitable. C. Public education is traditionally funded largely by local property taxes. D. All the choices.
Suppose that Dairy Barn Foods produces a regular sour cream with 10 grams of fat per serving and a "low fat" sour cream with only 5 grams of fat per serving (assume that this is still considered a lot of fat to consume per serving). According to prospect
theory, how should Dairy Barn promote its "low fat" sour cream? A. It should make no mention of fat content, either in absolute terms or relative to its regular sour cream. B. It should advertise that the "low fat" sour cream has only "half the fat" of the regular sour cream. C. It should advertise that the "low fat" sour cream has only 5 grams of fat per serving. D. It won't matter what strategy Dairy Barn uses, as consumers are sufficiently informed as to not be affected by the advertising.