Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. 
Figure 7.8Refer to Figure 7.8. If the price of capital is $20, then along isocost line AB total cost is
A. $300.
B. $1,200.
C. $2,400.
D. indeterminate from this information, as the price of labor is not given.
Answer: B
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With moral hazard, fair insurance contracts are not viable because
a. individuals' aversion to risk is reduced. b. insurance company's administrative costs are increased. c. individuals fear unscrupulous agents. d. probabilities of loss are increased over what is expected.
Suppose when a monopolist produces 75 units its average revenue is $10 per unit, its marginal revenue is $5 per unit, its marginal cost is $6 per unit, and its average total cost is $5 per unit. What can we conclude about this monopolist?
a. The monopolist is currently maximizing profits, and its total profits are $375. b. The monopolist is currently maximizing profits, and its total profits are $300. c. The monopolist is not currently maximizing profits; it should produce more units and charge a lower price to maximize profits. d. The monopolist is not currently maximizing profits; it should produce fewer units and charge a higher price to maximize profits.
Suppose the price change of a good causes no change in quantity demanded, we would say that the item is
A. perfectly elastic. B. perfectly inelastic. C. unitary elastic. D. infinitely elastic.
If MPC equals .82, MPS would equal ______________.
Fill in the blank(s) with the appropriate word(s).