As a firm continues to produce additional output, which of the following will continue to decline as output expands?
A. opportunity costs
B. average total costs
C. average fixed costs
D. marginal costs
Answer: C
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Refer to Figure 10.2. At output Qm, and assuming that the monopoly has set her price to maximize profit, the consumer surplus is:
A) CDE. B) BDEF. C) ADEG. D) 0DEQm. E) none of the above
A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65 . In the long run, the firm should
a. Shut down since price is greater than average cost b. Continue operating price is higher than average cost, its making a profit c. Continue operating as the firm is covering all the variable costs and some of the fixed costs d. Shut-down because it is cost effective to pay off the remaining fixed costs
Answer the following statement(s) true (T) or false (F)
1. According to the textbook application, the automobile industry and the state of California worked together to solve the state’s urban smog problem. 2. Title IV of the 1990 Clean Air Act Amendments uses tradeable allowances to control sulfur dioxide emissions. 3. Under the Clean Air Act, the major groups of air pollutants being controlled are natural pollutants, hazardous air pollutants, and greenhouse gases. 4. In the United States, seven criteria pollutants have been identified through criteria documents. 5. Among the criteria pollutants identified in the United States is carbon dioxide.
The most important function of middlemen is to
A) act as marketing agents for producers. B) expand the number of jobs in the economy. C) produce valuable information and lower transaction costs. D) protect consumers from exploitation. E) stand between buyers and sellers to control markups.