A perfectly competitive firm will shut down rather than produce if its
A) price is less than average variable cost.
B) price is less than total variable cost.
C) total revenue is less than total cost.
D) price is less than marginal cost.
A
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In the above figure, the tax incidence is
A) that most of it is paid by the buyers. B) that most of it is paid by the sellers. C) split equally so that the buyers and sellers pay the same amount. D) that neither the buyers nor the sellers pay it.
For a perfectly competitive firm, marginal revenue equals average revenue because the
A. firm’s supply curve is horizontal. B. industry’s demand curve is horizontal. C. firm’s demand curve is horizontal. D. industry’s supply curve is horizontal.
Combinations of goods on the production possibilities frontier
a. are unattainable without additional resources b. can be produced using currently available resources and technology c. reflect minimum normative value allocations d. will meet society's needs but not its wants e. are attainable only through international trade
The price elasticity of demand for gasoline is 0.27 and for wine is 2.9 . If the government had the choice of taxing only one, which of the following should it choose?
a. tax gasoline b. tax wine c. tax neither, but raise the price elasticity of demand for each d. tax neither, but lower the price elasticity of demand for each e. tax neither, but raise the price elasticity of demand for gasoline and lower it for wine