In many regulated industries, marginal cost will be
a. below average cost.
b. above total cost.
c. above marginal fixed cost.
d. below incremental cost.
a
You might also like to view...
The figure above shows how the PPF for cell phones and new cell-phone factories can expand. In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would
A) shift inward along the vertical axis. B) shift outward along the horizontal axis farther than the new PPF shown in the figure. C) shift outward along the vertical axis, not along the horizontal axis. D) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure. E) shift inward along the horizontal axis. The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies.
If a firm chooses to produce 100 units of output for $150 with 10 units of labor and 12 units of capital, when they could produce the same 100 units for $120 with 10 units of labor and 8 units of capital, the firm is technologically ________ and
economically ________. A) efficient; inefficient B) inefficient; efficient C) efficient; efficient. D) inefficient; inefficient
Ashwini is thinking of buying travel insurance (which pays her if she needs to cancel her trip) for her trip to Cancun over spring break. There is a 5 percent chance that she will need to cancel her trip
Without insurance she would lose the full $2,000 price of the trip; with insurance she would get a full refund of $2,000. The premium for this insurance is $105. Which of the following is CORRECT? I. The expected value of Ashwini's loss is $100. II. If Ashwini is risk averse she is willing to buy the insurance only if its price is less than $100. A) I only B) II only C) I and II D) neither I nor II
New homes built by the airport suffer from noise pollution created by a change in air-traffic patterns. If compensation is paid to the homeowners, _____
a. they will internalize the externality b. they will use the money to buy soundproofing for their homes c. it should be equal to the marginal cost of their harm d. it will reduce or eliminate any incentive to avoid the problem