Refer to the graph shown, which shows the demand and supply for a new vaccine against the common cold. Suppose once vaccinated, a person cannot catch a cold or give a cold to someone else. At the competitively determined output level, the marginal social benefit will be:
A. less than P0.
B. equal to P0.
C. greater than P0.
D. greater than or less than P0 depending on the income elasticity of demand and the effectiveness of the vaccine.
Answer: C
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Answer the following statement(s) true (T) or false (F)
1. The marginal cost of producing tea can be measured in dollars per pound of tea. 2. A firm's revenue can be calculated from its demand curve using the formula "price times quantity." 3. Fixed costs have no effect on a firm's profit. 4. Profits will be positive as long as marginal revenue is greater than marginal cost. 5. If marginal cost exceeds marginal revenue, then a reduction in output will create higher profits.
Refer to Figure 4.8. If half of your friends go to the beach and half go to the park, and you decide to go to the park, then
A) your friends at the beach will switch to the park. B) you and your friends at the park will switch to the beach. C) your friends at the beach will switch to the park and your friends at the park will switch to the beach. D) your friends will all stay where they are.
The figure above portrays a total revenue curve for a perfectly competitive firm. Curve A is straight because the firm
A) is a price taker. B) faces constant returns to scale. C) wants to maximize its profits. D) has perfect information.
The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes
a. voters to have little incentive to become informed about candidates and political issues. b. voters to spend a great deal of effort becoming informed about candidates and political issues. c. the percent of people who actually turn out to cast a vote on election day to be very high. d. people to be extremely reluctant to "waste" their votes on a third-party candidate.