When external costs result from the production of a good,
A. Consumers have an incentive to consume too little.
B. Both producers and consumers have an incentive to produce and consume too much.
C. Producers and consumers are not affected.
D. Producers have an incentive to produce too little.
Answer: B
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Refer to Figure 14.1. Other things equal, an increase in the inflation rate is best represented as a movement from
A) point A to point B. B) point C to point A. C) point C to point B. D) point B to point C.
Due to the impact of increasing returns to scale, smaller firms can produce at a lower average total cost than larger firms
a. True b. False Indicate whether the statement is true or false
The following diagram shows a market in equilibrium. If there was a $3.50 price floor, 
A. there would be a shortage of 60 units. B. there would be a surplus of 60 units. C. the quantity demanded would be 65 units. D. the quantity demanded would be 60 units.
Buying in bulk to save money is an example of ________.
A. elastic demand B. consumer surplus C. price gouging D. block pricing