Government intervention in the market
A. Always involves an opportunity cost.
B. Results in the free-rider dilemma.
C. Does not involve an opportunity cost if market outcomes are improved.
D. Never involves an opportunity cost because only market activities result in other goods and services being given up.
Answer: C
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The formula Es/(Es - Ed) is used to calculate the
A) deadweight loss from price support programs. B) increase in consumer surplus from a price ceiling. C) fraction of a specific tax that is passed through to consumers. D) none of the above
Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the formAVC = a + bQ + cQ2and obtained the following results. Total fixed cost (TFC) at Straker Industries is $1,000. 
If Straker Industries produces 20 units of output, what is estimated average total cost (ATC)?
A. $67.40 B. $117.40 C. $19.40 D. $1,348
The market supply curve is found by
A. estimating what the supply curve would be of one huge firm large enough to serve the entire market. B. horizontally summing up the supply curves of individual firms. C. vertically summing up the equilibrium prices of individual firms. D. surveys of consumer groups.
The producer surplus to a monopolist must be
A) less than zero or the firm is in violation of anti-trust statutes. B) at least as great as the producer surplus in a competitive market. C) positive, otherwise why would the monopoly produce? D) the same as for a competitive market.