The U.S. used high-pressure steam engines, whereas the British favored low-pressure engines. The reason for the American preference for high-pressure steam engines was that
(a) low-pressure steam engines, though more efficient, were complicated to build and operate and America lacked skilled labor compared to England.
(b) the high-pressure steam engines used extravagant amounts of wood fuel. The U.S. abundance
of wood compared to Europe made building high-pressure steam engines cheaper in the U.S.
(c) Americans simply lagged behind technologically compared to England and continued to use the outdated high-pressure steam engines.
(d) England had patents on the superior low-pressure steam engine and would not allow other nations to use the technology.
(b)
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An individual's permanent income is
A) constant over time. B) the same as his current income. C) unaffected by tax changes. D) equal to his expected average income.
When an economy achieves economic efficiency, it:
A. is beyond a Pareto optimal position. B. is at a Pareto optimal position. C. may or may not be at a Pareto optimal position. D. is below a Pareto optimal position.
In the long run, all of the following are true for a monopolist EXCEPT
A) P > ATC. B) P = MC. C) MR = MC. D) P > AVC.
Refer to Scenario 9.10 below to answer the question(s) that follow. SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.Refer to Scenario 9.10. In the long run, the cafe will want to
A. operate and expand. B. shut down but not go out of business. C. go out of business. D. operate but not expand.