When the production of a good generates external costs, a firm's private supply curve will be
A. vertical.
B. horizontal.
C. to the left of the social supply curve.
D. to the right of the social supply curve.
Answer: D
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If a perfectly competitive firm produces an output level at which price is less than marginal costs, then the firm should:
A. reduce output to earn greater profits or smaller losses. B. leave its output level unchanged provided it is covering its variable cost. C. expand output to earn greater profits or smaller losses. D. raise its price.
When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?
a. Your full room-and-board expenses should always be included. b. None of your room-and-board expenses should ever be included. c. You should include only the amount by which your room-and-board expenses exceed the income you earn while attending college. d. You should include only the amount by which your room-and-board expenses exceed the expenses for rent and food if you were not in college.
The two industries most commonly receiving protection are:
A. agriculture and steel. B. automobiles and pharmaceutica ls. C. agriculture and clothing. D. pharmaceutica ls and steel
Which of the following is false about potential output?
A. It is the level of output an economy can achieve when labor is employed at its natural level. B. It is the long run output level that guarantees price stability. C. If a country is producing its potential output, then it is producing at a point on its production possibilities frontier. D. It is also called the natural level of real GDP.