If variable cost at each output level doubles,
a. ATC doubles.
b. AFC doubles.
c. MC remains unchanged.
d. MC doubles.
e. MC less than doubles.
D
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Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?
a. Hire the firefighter because additional fire protection is priceless. b. Hire the firefighter if the cost of the new firefighter is less than $75,000. c. Do not hire the firefighter because the costs exceed the benefits. d. Hire the firefighter only if the benefit to the residents exceeds $75,000.
Which of the following causes external diseconomies of scale?
a. a downward-sloping short-run industry supply curve b. an upward-sloping short-run industry supply curve c. a downward-sloping long-run industry supply curve d. an upward-sloping long-run industry supply curve
To sell one more unit of a good, a monopolist must
A) lower the price on the last unit only. B) lower the price on all units. C) raise the price only on the last unit sold. D) raise the prices on all goods.
If Jessie studies economics for two hours instead of going to the movies with her friends, then
A) the benefit of studying is the missed movie. B) the opportunity cost of studying is the missed movie. C) Jesse definitely is making a rational choice. D) Jessie is ignoring a sunk cost. E) Jessie is not responding to any incentives.