A microeconomist would study all of the following issues EXCEPT
A. the impact of a snowstorm on the sales of snow shovels.
B. the impact of a change in consumer income on the sales of corn.
C. the effect of a change in income taxes on the nation's rate of unemployment.
D. the most efficient means for General Motors to produce an automobile.
Answer: C
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In order for a voluntary agreement to be reached in general, transaction costs should be
A) infinite. B) high relative to expected marginal benefits of the agreement. C) low relative to expected marginal benefits of the agreement. D) determined by the Environmental Protection Agency.
Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys its goods in large quantities and, therefore, at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices. Local retailers, like the neighborhood drug store, often go out of
business because they lose customers. This story demonstrates that a. consumers do not react to changing prices. b. there are diseconomies of scale in retail sales. c. there are economies of scale in retail sales. d. there are diminishing returns to producing and selling retail goods.
If firms in a monopolistically competitive industry are operating with positive economic profit, over time we would see
A) firms alter their advertising rates until they made at least normal profits. B) some firms entering the industry, causing the market supply curve to shift to the right, lowering price. C) some firms entering the industry, causing the demand curves of the existing firms to shift to the left. D) some firms entering the industry, causing the demand curves of the existing firms to shift to the right.
Following is a firm's expansion path. The price of capital is $5 per unit; the price of labor is $2 per unit. 
When output is 30 units, what is long-run total cost?
A. $60 B. $150 C. $105 D. $260 E. none of the above