Refer to the information provided in Figure 16.2 below to answer the question(s) that follow.
Figure 16.2Refer to Figure 16.2. The ________ imposed as a result of producing cars is $10.00 per car.
A. marginal private cost
B. marginal damage cost
C. total cost
D. marginal social cost
Answer: B
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One problem associated with a monopoly firm is that it
A) produces too little output but also charges a low price. B) produces too much output and charges too low a price. C) restricts output and charges a relatively higher price than a purely competitive firm. D) is just as good as a purely competitive firm in terms of output and price.
If demand is price elastic, a decrease in seller's total revenue would result from a(n)
a. decrease in price b. increase in quantity demanded c. increase in price d. decrease in income for an inferior good e. increase in total cost to the seller
If there is a sudden increase in government spending, which of the following should the Fed do if it wants to keep the price level steady?
a. Do nothing, since the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, since the price level usually does not change when government spending increases d. Decrease the required reserve ratio e. Buy bonds in the open market
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be: Demand: Qd = 10,000 ? 10,000P + 1.0MSupply: Qs = 80,000 + 10,000P ? 4,000PIwhere Q is quantity, P is the price of the product, M is income, and PI is the input price. The manager of the perfectly competitive firm uses time-seris data to obtain the following forecasted values of M and PI for 2015:
= $50,000 and 
I = $20The manager also estimates the average variable cost function to beAVC = 3.0 ?
0.0027Q + 0.0000009Q2Total fixed costs will be $2,000 in 2015. The profit (loss) is A. $2,600 B. $4,000 C. $2,000 D. $3,250 E. none of the above