The marginal cost curve always intersects the average total cost curve at the point at which the average total cost curve
A. is zero.
B. is at its maximum.
C. has a vertical slope.
D. is at its minimum.
Answer: D
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In the United States, runs on banks are prevented because
A) banks are forbidden to make unprofitable loans. B) banks have the option of denying depositors access to their funds. C) the government guarantees bank accounts for up to $250,000. D) banks keep 100 percent of their deposits on hand.
In the above figure, if the natural monopoly is regulated using an average cost pricing rule, but the firm can pad its costs and make the regulator believe its costs are LRAC (inflated), then the price the firm charges will increase from
A) $18 to $24. B) $12 to $24. C) $12 to $18. D) $18 to $36.
Refer to the information below. If the firms' managers form a price -fixing cartel that maximizes the firms' total profit, what is the total quantity produced by all firms?
A small nation has three gasoline suppliers with a linear monthly market demand equal to: Q = 500,000 - 5P. Each firm's marginal cost (MC) and average total cost (ATC) curves are horizontal at $10,000 per month. A) 450,000 B) 22,000 C) 225,000 D) 45,000
The infant industry argument has a normative economic basis because
A) clearly, all industries need to be protected. B) protected industries are selected on a factual basis. C) the government must decide which industries should be protected. D) political corruption is the only deciding factor.