Refer to Figure 11-11. For output rates greater than 20,000 picture frames per month
A) the firm will not make a profit because the average cost of production will be too high.
B) the firm will experience diminishing returns.
C) the short-run average total cost will equal the long-run average total cost of production.
D) the firm will experience diseconomies of scale.
D
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The marginal dollar cost to a patient of visiting a doctor when the patient's bill will be paid entirely by insurance is
A) the same as if the patient had no insurance. B) the value of the care not received by some other patient who couldn't get an appointment. C) zero. D) zero only if the patient does not pay the insurance premiums.
One way to avoid the principal-agent problem would be to have:
A. the employee constantly monitor the employer's activities. B. the employer constantly monitor the employee's efforts. C. the employer share all management choices with employees before making decisions. D. the employee sign a waiver of release.
The provisions in state constitutions requiring them to balance their budgets mean that:
A. state governments can follow a functional finance approach with greater consistency than the federal government, which has no such requirement. B. state government spending acts as an automatic stabilizer for the national economy. C. state governments often behave procyclically because lower revenues during recessions means lower state spending. D. state governments can only use monetary policy to affect their economies.
The owner of a perfectly competitive firm that is earning economic losses in the short run
A) should alter the rate of output in order to increase profitability. B) should cut his own salary in order to reach the break-even point. C) is actually losing more than he thinks because not all of the implicit costs have been considered. D) is earning less than he would if he worked for someone else.