If the firm in the figure above attempted to minimize its average total cost by producing 100 pairs of Tommy jeans per day at an average total cost of $20 per pair and it sold those jeans for $80 per pair, the firm would ________
A) earn zero economic profit
B) earn a larger economic profit that a firm that produced 125 jeans because the ATC of producing 125 jeans is higher than the ATC of producing 100 jeans
C) incur an economic loss
D) earn a smaller economic profit than a firm that produced 125 jeans
E) achieve an efficient use of resources
D
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An AIDS epidemic hurts an economy by
a. requiring additional expenditures on health care b. reducing the working-age population c. increasing the child mortality rate d. reducing the growth of output e. all of the above
Suppose that a government agency is trying to decide between two pollution reduction policy options. Under the permit option, 100 pollution permits would be sold, each allowing emission of one unit of pollution. Firms would be forced to shut down if they produced any units of pollution for which they did not hold a permit. Under the pollution tax option, firms would be taxed $250 for each unit of pollution emitted. The regulated firms all currently pollute and face varying costs of pollution reduction, though all face increasing marginal costs of pollution reduction. Suppose the tax policy is adopted. A firm will be willing to pay the tax if $250 is less than or equal to:
A. the average cost of eliminating one unit of pollution. B. its average total cost of production. C. its marginal revenue. D. the cost of reducing its existing pollution by one unit.
Our model of long-run economic growth suggests that
A) the U.S. growth slowdown since 1950 has been caused largely by low saving in the U.S. B) a higher rate of saving in the U.S. cannot do much to increase the U.S. growth rate over the next two decades. C) saving in the U.S. has exceeded the golden-rule level. D) all of the above E) none of the above
Which of the following is NOT a likely goal of macroeconomic coordination between nations?
A) Reducing trade barriers B) Achieving a desirable level of world economic growth C) Avoiding a global economic crisis D) Correcting global economic imbalances