Figure 10.2 shows a monopolist's demand curve. Suppose that the marginal cost is $6 for all units and the current output level is 4 units. Then which of the following is true?
A. The marginal revenue is less than the marginal cost.
B. The price is greater than the average total cost.
C. The firm is producing the profit maximizing level of output.
D. All of these are correct.
Answer: A
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The major difficulty with using a tax on pollution instead of a fixed percentage reduction regulation is:
A. that it only works in theory. B. that firms would not pay the tax. C. establishing the optimal size of the tax. D. that it would cause prices to rise.
If significant economies of scale are present, large firms will be much more efficient producers than small firms.
Answer the following statement true (T) or false (F)
Suppose that 10,000 people are willing to spend a maximum of $20 each to preserve one acre of rainforest. A conservation group mails out a request to each person asking him or her to mail in $40 to preserve one acre of rainforest. How many acres of rainforest will be preserved with this program?
a. Zero acres b. 1,000 acres c. 5,000 acres d. 10,000 acres e. There is not enough information to answer the question
Fill out the table and answer the question below. 
The average product of labor when 4 units of labor are employed is
A. 22. B. 19. C. 16. D. 20.