The dramatic increase in the standard of living since the Industrial Revolution
A. means that societies and individuals face no constraints.
B. has not meant unlimited abundance for societies or persons.
C. means that “opportunity cost” is a meaningless concept.
D. has reduced the choices open to persons.
E. has made economics less useful to persons.
Answer: B
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In the single-polluter case, suppose a firm faces an emission charge implemented as a marginal tax (MT) of 12 and that its MAC = 0.8A. Based on this information, the firm
a. is better off paying the tax at abatement levels below 15 units b. should abate pollution for all abatement levels up to 15 units c. is better off paying the tax as long as the abatement level is 1.5 units or less d. none of the above
If there is a shortage in a free market, then
A) consumers will offer to pay a lower price for the good, and the price will fall toward the equilibrium level. B) consumers will offer to pay a higher price for the good, and the price will rise toward the equilibrium level. C) suppliers will decrease their output to match demand. D) suppliers will accept any price below equilibrium.
Which of the following statements concerning a monopolist is FALSE?
A) A monopolist will produce at which MR = MC. B) For a monopolist, marginal revenue is less than price. C) A monopolist will charge the highest price at which any individual will purchase the product. D) A monopolist will shut down if price is less than average variable cost.
Which of the following falsely describes a nondiscriminating monopolist at profit maximization?
a. Price is greater than marginal cost. b. Economic profit is always positive. c. Marginal revenue is equal to marginal cost. d. Marginal revenue will typically be less than price. e. Average total cost will not be at a minimum.