A firm's markup over its marginal cost is greater:
A. the more elastic is the demand curve.
B. the less elastic is the demand curve.
C. the lower its fixed costs.
D. the lower its average costs.
B. the less elastic is the demand curve.
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Which of the following is an effect of a minimum wage law that establishes a ceiling wage below the current market clearing wage?
A) Surplus labor, or unemployment B) A decrease in the market clearing wage C) A decrease in the quantity of labor supplied D) An increase in the quantity of labor supplied
Two companies, Dirty Inc. and Filthy Inc., each of which has access to 5 different production processes, each of which has a different cost and produces a different amount of pollution. The daily costs of the processes and the number of tons of smoke emitted are shown in the table below.Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Dirty Inc. ($/day) $110$200$380$740$1,460 Cost to Filthy Inc. ($/day) $400$430$490$580 $700If the City Council imposes a tax of $91 per day on each ton of smoke emitted, then what will be the total cost to society of the resulting reduction in pollution?
A. $180 B. $360 C. $90 D. $270
Using the official measure of unemployment, which of the following people is considered unemployed?
A) a part-time worker who wishes to work full time B) a person who gave up looking for jobs because he or she was discouraged about his or her job prospects C) a person who has been searching for work, but turns down a job paying a lower wage rate than desired D) a person who is working but expects to be laid off at the end of the month
Carefully explain if the following statements are true, false, or uncertain
a. If average cost is increasing, marginal cost must be increasing. b. If there are diminishing returns, the marginal cost curve must be positively sloped. c. Marginal costs decrease as output increases because the firm can spread fixed costs over more units.