Refer to the following graph.
This set of cost curves is:
A. wrong because the average total cost and marginal cost curves are switched.
B. correct.
C. wrong because the average total cost and average variable cost curves are reversed.
D. wrong because the AFC should always be downward-sloping.
Answer: D
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List three different price indices and explain how they differ in terms of the market basket on which they are based
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The number of people officially unemployed is not the same as the number of people who can't find a job because:
a. the armed forces is included. b. some people have jobs but continue to look for a better one. c. some people who can't find a job become discouraged and quit looking. d. none of these.
A monopoly exists when there is only one producer in an industry, and no close substitutes for the product exist
a. True b. False Indicate whether the statement is true or false
Suppose the production of helicopters is an industry characterized by increasing returns to scale and an Argentine firm, Cicare, is the only player in this market. The firm caters to the global market and earns a profit of $10 million. Flettner, a German firm has been considering entering this market for a while, but it is aware that its entry will cause each firm to lose about $4 million
However, a government subsidy allows Flettner to enter the helicopter market and Cicare incurs a loss of $4 million due to its entry. Eventually, Flettner evolves as the monopoly supplier of helicopters while Cicare is forced to shut down. This conclusion rests on which of the following assumptions? a. The German government was experiencing a budget surplus. b. There was low demand for Cicare automobiles in the world market. c. The German government was able to forecast accurately the subsidy required to induce Flettner to produce helicopters. d. The quality of Flettner's helicopters were inferior compared to that of Cicare's. e. Cicare diversified into the production of automobiles.