The supply curve for a monopoly is:
A. the portion of the marginal cost curve that lies above the average total cost curve.
B. the portion of the marginal cost curve that lies above the average fixed cost curve.
C. not a curve but a single point.
D. the portion of the marginal cost curve that lies above the average variable cost curve.
Answer: C
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The Federal Reserve increases interest rates when it wants to reduce aggregate demand to fight inflation. How do increases in the interest rate reduce aggregate demand?
What will be an ideal response?
Economies of scale exist whenever long-run average costs:
a. Increase as output is increased b. Remain constant as output is increased c. Decrease as output is increased d. Decline and then rise as output is increased e. None of the above
An effective minimum wage creates a surplus of labor and increases the level of unemployment.
Answer the following statement true (T) or false (F)
Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Firm X ($/day)$500$514$530$555$585Cost to Firm Y ($/day)$400$420$445$480$520Cost to Firm Z ($/day)$300$325$360$400$550 Suppose the government imposes a tax of $21 on each ton of smoke emitted. To minimize costs, Firm X will emit ________ tons; Firm Y will emit ________ tons, and Firm Z will emit ________ tons.
A. 2; 3; 4 B. 3; 4; 4 C. 1; 2; 3 D. 1; 2; 4