If a firm's total costs are $75 when it produces 10 units of output and $80 when it produces 11 units of output, then the marginal cost of producing the 11th unit is
A. $1.
B. $5.
C. $8.09.
D. $10.
Answer: B
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If your lawn and shrubs were killed by the fumes from a nearby factory and you hired a lawyer to sue the polluting firm, your legal fees would be considered
A) external costs. B) transactions costs. C) the social costs of pollution. D) sunk costs.
Suppose the current situation is such that the price level is 120, real GDP is $17 trillion, and GDP along the long-run aggregate supply curve is $16.6 trillion. What will take place to restore the long-run equilibrium?
A) The price level will fall until long-run aggregate supply increases to $17 trillion. B) The price level will fall and money wage rates will rise until real GDP along the long-run aggregate supply curve is $17 trillion. C) Money wage rates will rise until real GDP reaches $16.6 trillion. D) Aggregate demand will increase until both short-run and long-run aggregate supply equal $17 trillion.
The above figures show the market for gasoline. Which figure shows the effect of an increased preference for cars that are smaller and more fuel efficient?
A) Figure A B) Figure B C) Figure C D) Figure D
Because a price setter has control over both the level of output it produces and the price it charges, it can select from a number of different combinations of output and price levels that will maximize its profits
Indicate whether the statement is true or false