The marginal cost curve is U-shaped because of the law of increasing opportunity costs
Indicate whether the statement is true or false
FALSE
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A tax is sometimes used by government to correct the problems associated with
A) negative externalities. B) positive externalities. C) internal benefits. D) external benefits.
At a fair carnival roulette wheel, a player can either win $10, $30, or $80 . Assuming that the wheel is fair, what is the expected value of the play?
a. $20 b. $40 c. $60 d. $80
Consider two individuals — Marquis and Serena — each of whom would like to wear sweaters and eat tasty food. The gains from trade between Marquis and Serena are most obvious in which of the following cases?
a. Marquis is very good at knitting sweaters and at cooking tasty food, but Serena's skills in both of these activities are very poor. b. Marquis and Serena both are very good at cooking tasty food, but neither has the necessary skills to knit a sweater. c. Marquis's cooking and knitting skills are very poor, and Serena's cooking and knitting skills are also very poor. d. Marquis's skills are such that he can produce only sweaters, and Serena's skills are such that she can produce only tasty food.
Which of the following statements best reflects the production decision of a profit-maximizing firm in a competitive market when price falls below the minimum of average variable cost?
a. The firm will continue to produce to attempt to pay fixed costs. b. The firm will immediately stop production to minimize its losses. c. The firm will stop production as soon as it is able to pay its sunk costs. d. The firm will continue to produce in the short run but will likely exit the market in the long run.