If a restaurant was a natural monopoly, dividing the restaurant equally into two separate restaurants would
A) decrease marginal cost.
B) raise average total cost.
C) increase total revenue.
D) make marginal revenue less elastic.
Answer: B
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Adam Smith argued that government's role in society would be to do absolutely nothing. True or False.
A good is considered to be nonexcludable if
A) your consumption of the good reduces the quantity available for others to consume. B) the producer can keep those who did not pay for the good from consuming the good. C) the producer finds it difficult to keep those who did not pay for the good from consuming the good. D) it is jointly owned by all members of a community.
Which of the following costs can be positive when output is zero?
A) average variable cost B) total variable cost C) marginal cost D) total fixed cost E) None of the above because when output is zero there are no costs.
One difference between the federal government budget and state and local budgets is that
a. deficits in state and local governments average zero over longer periods of time. b. cyclical deficits are zero for state and local governments. c. state and local governments typically run surpluses. d. both a and b. e. none of the above.