Every point on the long-run average cost curve is
A) also a minimum point on a short-run average cost curve.
B) on a short-run average total cost curve.
C) on a short-run average variable cost curve.
D) on a short-run marginal cost curve.
Answer: B
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The above figure shows the U.S. market for chocolate. With no international trade, consumer surplus is equal to ________ and producer surplus is equal to ________
A) area A + area B + area C + area D; area E B) area B + area C + area D; area A + area E C) area A; area E D) area C + area D; area B + area E E) area E; area A + area B + area C + area D
Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period. Therefore
A) U.S. producers have a comparative advantage in oranges. B) Canadian producers have a comparative advantage in beef. C) both countries could gain through specialization and exchange. D) all of the above are true. E) none of the above is true.
John wants to buy a new lawn mower. He can either buy it in the US and pay $500 or buy it in Mexico and pay 6188 Mexican Pesos. At the exchange rate of 1 Mexican Peso=0.771US$, ignoring any other costs, he would
a. Prefer buying in the US b. Prefer buying in Mexico c. Be indifferent about where he buys his television d. None of the above
The inverse demand in a Cournot duopoly is P = a ? b(Q1 + Q2), and costs are C1(Q1) = c1Q1 and C2(Q2) = c2Q2. The government has imposed a per-unit tax of $t on each unit sold by each firm. The tax revenue is:
A. greater than t times the total output of the two firms should there be no sales tax. B. t times the total output of the two firms should there be no sales tax. C. less than t times the total output of the two firms should there be no sales tax. D. None of the answers is correct.