In the above table, when output increases from 8 to 12 units, the marginal cost of one of those 4 units is
A) $1.20.
B) $2.00.
C) $5.00.
D) $15.00.
C
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Assume an industry, currently dominated by one firm, experiences a large decline in fixed costs. This will
A) make entry of other firms more likely. B) make entry of other firms less likely. C) serve as higher barrier to entry. D) induce the incumbent firm to exit the industry.
An example of a moral hazard would be Andrew leaving the washer, dryer, and dishwasher running at home while he goes to class since he is fully insured and he will not be at risk if a fire occurs
a. True b. False
A direct tax
a. can be shifted forward. b. can be shifted backward. c. cannot be shifted. d. has to be proportional.
Owners of a firm want the managers to make business decisions which will
A. maximize the value of the firm. B. maximize expected profit in each period of operation. C. maximize the market share of the firm. D. both a and b are correct when revenue and cost conditions in one time period are independent of revenues and costs in future time periods.