Average fixed costs diminish continuously as output increases.
Answer the following statement true (T) or false (F)
True
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A $10 per-unit tax on cell phones raises the equilibrium price paid by consumers by $5. Before the tax, 5,000 cell phones were sold per year. The revenue from the tax is
A) zero. B) positive but less than $50,000 per year. C) $50,000 per year. D) more than $50,000 per year.
A natural monopoly, such as the local telephone company, is characterized by
a. a lack of natural competitors b. low fixed costs and diseconomies of scale c. economies of scale d. a lack of government regulation e. constant costs of production
First National Bank has zero excess reserves. Ceteris paribus, if the required reserve ratio increases, which of the following will happen immediately?
A. The bank will not have enough required reserves. B. The bank will have excess reserves. C. Bank assets will increase. D. Total reserves will increase.
What is Italy's opportunity cost of producing 5 pairs of shoes?
