Mr. James' company produces candy bars. Which is NOT a variable input for this firm?
A) Sugar
B) Assembly line workers
C) The big chocolate stirring machines
D) Packaging materials
Answer: C) The big chocolate stirring machines
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For a common resource, efficiency requires that the ________ equals the ________
A) marginal private benefit; marginal private cost B) marginal social benefit; marginal social cost C) marginal private benefit; marginal social benefit D) marginal social cost; marginal private cost
Is it possible in the present to produce at a point that is outside the production possibilities frontier? Why or why not? With the passage of time how might a point outside the present production possibilities frontier be possible?
What will be an ideal response?
Refer to Figure 4-5. What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?
A) D + E B) D C) D + F D) F
Drug companies are allowed to be monopolists in the drugs they discover in order to
a. allow drug companies to charge a price that is equal to their marginal cost. b. discourage new firms from entering the drug market. c. encourage research. d. allow the government to earn patent revenue.