When government intervenes in the production process because external costs exist, it typically attempts to shift the industry's
A. supply curve to the left.
B. demand curve to the right.
C. demand curve to the left.
D. supply curve to the right.
Answer: A
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Suppose tennis shoes cost $50 per pair and firms supply 50,000 pairs of shoes. If the price decreases to $45 and firms decide to supply 48,000, the elasticity of supply equals
A) 0.0025. B) 0.04. C) 2.63. D) 0.39.
A decrease in the supply of money will, according to the quantity theory of money, lead to
A) a higher price level. B) a higher nominal Gross Domestic Product (GDP). C) a lower real Gross Domestic Product (GDP). D) a lower price level.
If a firm increases output when MR < MC, then:
a. profit will equal zero. b. profit will increase. c. profit will decrease. d. profit will remain the same. e. the firm is minimizing losses.
Refer to Figure 9.2. Whenever a CD is sold, 5% of the revenue goes to the artist and the remainder of the revenue goes to the record company. The graph above depicts R, the total revenue from sales; (0.95)R, the record company's share; and C, the cost of producing the CD (which the record companies bears). At what quantity would the record company like to produce the CD?
A. 0
B. Q1
C. Q2
D. Q3