If marginal costs are rising
A) total fixed costs are falling
B) average fixed costs are constant.
C) average fixed costs are rising
D) none of these choices.
D
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Suppose that a government agency is trying to decide between two pollution reduction policy options. Under the permit option, 100 pollution permits would be sold, each allowing emission of one unit of pollution. Firms would be forced to shut down if they produced any units of pollution for which they did not hold a permit. Under the pollution tax option, firms would be taxed $250 for each unit of pollution emitted. The regulated firms all currently pollute and face varying costs of pollution reduction, though all face increasing marginal costs of pollution reduction. Because firms face increasing marginal costs to reduce pollution, the demand curve for pollution permits will be:
A. downward sloping. B. perfectly inelastic. C. upward sloping. D. perfectly elastic.
When a firm hires 10 units of labor, 20 pens are produced. When it hires another unit of labor, the total output increases to 23 pens. If the price of one pen is $2, the value of marginal product of the eleventh unit of labor is:
A) $1.50. B) $2. C) $4. D) $6.
Auction markets usually
a. cause a shortage because there is more than one bidder for an item b. cause a surplus because auctions seldom sell off all the items at the auction c. fail to clear the market d. arrive at an equilibrium price within minutes for each item auctioned e. are unfair and for this reason have been regulated by government
Assume that the market for cage-free eggs is perfectly competitive. All else equal, as farmers find it less profitable to produce and sell cage-free eggs in this market
A) the demand curve will shift to the left and the equilibrium price will decrease. B) the supply curve will shift to the left and the equilibrium price will increase. C) the supply curve will shift to the right, the demand curve will shift to the left, and the equilibrium price will decrease. D) the supply curve will shift to the left, the demand curve will shift to the left, and the equilibrium price will increase.