If an additional unit of labor costs $20 and has a MPP of 15 units of output, the marginal cost is
A. $30.00.
B. $0.75.
C. $1.33.
D. $300.00.
Answer: C
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Incremental costs
a. are the total costs of abatement and regulation linked to environmental policy b. include only explicit costs c. refer to the change in costs associated with an environmental policy initiative d. include only implicit costs
Short run average expenditure curves are tangent at their lowest point to the long run average cost curve.
Answer the following statement true (T) or false (F)
A monopolist is earning an economic profit. At the present output level, MR = $35 and MC = $30 . Which of the following should the firm do to increase profit?
a. raise output and lower price b. do not change price or output c. raise price and raise output d. raise price and lower output e. lower price and lower output
If Suzette responds to an increase in the interest rate by decreasing her saving, then, for Suzette,
a. the increase in the interest rate creates an income effect that is greater than the substitution effect. b. the increase in the interest rate creates a substitution effect that is greater than the income effect. c. consumption when young and consumption when old are perfect substitutes. d. consumption when young and consumption when old are perfect complements.