FInal ECO 2023
The average variable cost of producing 240 units is $0.13. $0.19. $0.32. $0.80.
$0.19.
Figure 8-2 The vertical distance between points C and D represents a tax in the market. Refer to Figure 8-2. The loss of consumer surplus as a result of the tax is $12. $8. $18. $4.
$12.
The vertical distance between points C and D represents a tax in the market. Refer to Figure 8-2. The loss of producer surplus as a result of the tax is $24. $3. $12. $4.
$12.
Suppose a tax is imposed on each new hearing aid that is sold. The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. As a result of the tax, the equilibrium quantity of hearing aids decreases from 10,000 to 9,000, and the deadweight loss of the tax is $60,000. We can conclude that the tax on each hearing aid is $60. $120. $160. $200.
$120.
As a result of the tax, consumer surplus decreases by $130, producer surplus decreases by $170, tax revenue is $240, and deadweight loss is $60. $150, producer surplus decreases by $150, tax revenue is $240, and deadweight loss is $60. $160, producer surplus decreases by $160, tax revenue is $240, and deadweight loss is $80. $240, producer surplus decreases by $240, tax revenue is $400, and deadweight loss is $80.
$160, producer surplus decreases by $160, tax revenue is $240, and deadweight loss is $80.
Diamond is an organic brocolli farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Diamond helps people organize their houses. Due to the popularity of her home-organization services, Farmer Diamond has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Diamond charges $45 an hour for her home-organization services. One spring day, Diamond spends 8 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of brocolli. Refer to Scenario 13-3.Diamond's accounting profit from farming equals −$80. $130. $170. $260.
$170.
Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Korie currently has $500,000 in the bank earning 3 percent interest per year. Refer to Scenario 13-1. Suppose Korie purchases the factory using $200,000 of her own money and $200,000 borrowed from a bank at an interest rate of 6 percent. What is Korie's annual opportunity cost of purchasing the factory? $3,000 $6,000 $15,000 $18,000
$18,000
Consumer surplus without the tax is $24, and consumer surplus with the tax is $6. $6, and consumer surplus with the tax is $24. $16, and consumer surplus with the tax is $4. $4, and consumer surplus with the tax is $16.
$24, and consumer surplus with the tax is $6.
Kachina is a senior majoring in graphic design at Awesome University (AU). While she has been attending college, Kachina started a computer consulting business to help senior citizens learn how to use their iPads. Kachina charges $25 per hour for her consulting services. She also works 5 hours a week for the Economics Department to maintain that department's Web page. The Economics Department pays Kachina $20 per hour. Refer to Scenario 13-2. If Kachina can work additional hours at either job, what is the opportunity cost if she spends one hour reading a novel? $20 $25 $100 $125
$25
The per-unit burden of the tax on sellers is $4. $6. $16. $18.
$4.
Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. Output (Instructional modules per month) Fixed Cost (Dollars) Variable Cost (Dollars) Total Cost (Dollars) Marginal Cost (Dollars) Average Fixed Cost (Dollars per unit) Average Variable Cost (Dollars per unit) Average Total Cost (Dollars per unit) 01,080 11,0804001480400 2 450 9653 1,3502,430 4 1,900 475 5 2,500 216 6 4,280700 7 4,100 8 5,400 135 9 7,300 10 10,880 980 Refer to Table 13-10. What is the average variable cost for the month if 6 instructional modules are produced? $180.00 $533.33 $700.00 $713.33
$533.33
ne month, Teacher's Helper produced 18 instructional modules. What was the average fixed cost for that month? $60 $108 $811 It can't be determined from the information given.
$60
If the labor supply curve is very elastic, a tax on labor has a large deadweight loss. raises enough tax revenue to offset the loss in welfare. has a relatively small impact on the number of hours that workers choose to work. results in a large tax burden on the firms that hire labor.
+ has a large deadweight loss.
Cameron's Lamp Emporium produced 300 lamps but sold only 230 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 230 units sold was $90. Total profit for Cameron's Lamp Emporium would be -$2,300. $20,700. $27,000. $30,000.
-$2,300.
Suppose the cost to build the park is $24 per acre and that the residents have agreed to split the cost of building the park equally. To maximize his own surplus, how many acres would Cedric like Springfield to build? 0 acres 1 acre 2 acres 3 acres
0 acres
Suppose a certain firm is able to produce 110 units of output per day when 12 workers are hired. The firm is able to produce 120 units of output per day when 13 workers are hired, holding other inputs fixed. The marginal product of the 13th worker is 4 units of output. 5 units of output. 10 units of output. 120 units of output.
10 units of output.
Kate is a florist. Kate can arrange 27 bouquets per day. She is considering hiring her husband Amir to work for her. Together Kate and Amir can arrange 41 bouquets per day. What is Amir's marginal product? 68 bouquets 41 bouquets 29 bouquets 14 bouquets
14 bouquets
If the tax on a good is increased from $1 per unit to $4 per unit, the deadweight loss from the tax increases by a factor of 5. 9. 16. 24.
16.
What is total output when 1 worker is hired? 10 30 45 75
30
Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. William can arrange 18 bouquets per day. What would be the total daily output of Kate's firm if she hired her husband? 18 bouquets 19 bouquets 20 bouquets 38 bouquets
38 bouquets
The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of fertilizer is 0.008. The cost of imposing a regulation that would ban the chemical is $31 million. If the value of a human life is equal to $8 million, how many people must the policy affect in order for the benefits to exceed the costs? 248 485 3,101 3,876
485
The marginal product of the second worker is 90 units. 85 units. 80 units. 20 units.
80 units.
Which of the following goods is rival and excludable? An uncongested toll road An uncongested nontoll road A congested nontoll road A congested toll road
A congested toll road
Which of the following goods is rival and excludable? An uncongested toll road An uncongested nontoll road A congested nontoll road A congested toll road
A congested toll road
Which of the following is an example of the Tragedy of the Commons? The number of professional soccer teams increases to the point where the quality of the games decreases, as does television viewership. A type of duck becomes extinct due to overhunting. An amusement park becomes so crowded that it institutes a lottery for admissions. A monkey breeding program becomes so successful that local zoos have to build additional exhibits so that visitors can view the primates.
A type of duck becomes extinct due to overhunting.
Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory? ATCB ATCD ATCC ATCA
ATCB
Which of the following statements is correct? Marginal cost is rising for quantities higher than D because marginal cost is higher than average total cost. Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost. Marginal cost is minimized at B because at that quantity, marginal cost equals average variable cost. Average total cost is declining for quantities less than C because average variable cost is less than average total cost.
Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost.
Which of the curves is most likely to represent marginal cost? Curve A Curve C Curve D Curve B
Curve A
Figure 8-4 Suppose the government imposes a $10 per unit tax on a good. Refer to Figure 8-4. The tax causes producer surplus to decrease by the area D + F. D + F + G. D + F + J. D + F + G + H.
D + F.
Suppose the government imposes a $1 tax in each of the four markets represented by demand curves D1, D2, D3, and D4. The deadweight will be the smallest in the market represented by D1. D2. D3. D4.
D1.
Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week. Refer to Scenario 8-1. Assume Erin is required to pay a tax of $40 when she hires someone to clean her house for a week. Which of the following is correct? Erin will now clean her own house. Ernesto will continue to clean Erin's house, but his producer surplus will decline. Total economic welfare (consumer surplus plus producer surplus plus tax revenue) will increase. Erin will continue to hire Ernesto to clean her house, but her consumer surplus will decline.
Erin will now clean her own house.
Which of the figures represents the total cost curve for a typical firm? Figure 1 Figure 2 Figure 3 Figure 4
Figure 2
Which firm has constant returns to scale over the entire range of output? Firm 1 Firm 2 Firm 3 Firm 4
Firm 3
Suppose a 20th unit of the good were sold by a seller to a buyer. Which of the following statements is correct? For the 20th unit, the difference between the buyer's value and the seller's cost is less than the tax per unit. For the 20th unit, the difference between the buyer's value and the seller's cost is greater than the tax per unit. For the 20th unit, the difference between the buyer's value and the seller's cost is equal to the tax per unit. It makes sense for the buyer to buy and for the seller to sell the 20th unit, with or without the tax in place.
For the 20th unit, the difference between the buyer's value and the seller's cost is less than the tax per unit.
Which of the following explains why long-run average total cost at first decreases as output increases? Diseconomies of scale Less-efficient use of inputs Fixed costs becoming spread out over more units of output Gains from specialization of inputs
Gains from specialization of inputs
Which graph correctly illustrates the relationship between the size of a tax and the size of the deadweight loss associated with the tax? Graph (a) Graph (b) Graph (c) Graph (d)
Graph (a)
A regional elephant management board recently proposed a five-year moratorium on elephant hunting in Botswana based on a study of the elephant population. Which of the following statements is not correct? Elephants are rival but not excludable. The elephant population is an example of the tragedy of the commons. Reducing the quota on the number of elephants any hunter can kill would have a protective effect on the elephant population. If left unregulated, the elephant population will likely increase.
If left unregulated, the elephant population will likely increase.
Luis, Mina, and Daniel all would like a play area while waiting at their children's bus stop. The neighborhood association is considering installing playground equipment at the bus stop. Luis values the equipment at $150, Mina at $100, and Daniel at $100. The equipment and labor for installation cost $300. If Luis, Mina, and Daniel are the only residents who value the equipment, what should the neighborhood association do? Install the playground equipment because people would like a play area. Do not install the playground equipment because the costs outweigh the benefits. Install the playground equipment because the benefits outweigh the costs. Do not install the playground equipment to prevent the Tragedy of the Commons problem of overuse.
Install the playground equipment because the benefits outweigh the costs.
Kate is a personal trainer whose client William pays $80 per hour-long session. William values this service at $100 per hour, while the opportunity cost of Kate's time is $75 per hour. The government places a tax of $10 per hour on personal trainers. After the tax, what is likely to happen in the market for personal training? Kate and William will agree to a new price somewhere between $85 and $100. Kate and William will agree to a new price somewhere between $70 and $110. Kate will no longer offer personal training services to William because she must charge more than $100 in order to cover her opportunity costs and pay the tax. The price will remain at $80, and Kate will pay the $10 tax.
Kate and William will agree to a new price somewhere between $85 and $100.
Who among the following is a free rider? Mike listens to National Public Radio, but does not contribute to any fundraising efforts. Greg takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day. Peter sends his five children to a private school rather than to the public school in his neighborhood. Bobby goes to Marsha's house to watch a basketball game on the local commercial television channel.
Mike listens to National Public Radio, but does not contribute to any fundraising efforts.
Taxes on labor encourage which of the following? Labor demand to be more inelastic Mothers to stay at home rather than work in the labor force Workers to work overtime Fathers to take on second job
Mothers to stay at home rather than work in the labor force
The phenomenon of free riding is most closely associated with which type of good? Private goods Club goods Inferior goods Public goods
Public goods
Roland mows Karla's lawn for $25. Roland's opportunity cost of mowing Karla's lawn is $20, and Karla's willingness to pay Roland to mow her lawn is $28. Refer to Scenario 8-2. Assume Roland is required to pay a tax of $3 each time he mows a lawn. Which of the following results is most likely? Karla now will decide to mow her own lawn, and Roland will decide it is no longer in his interest to mow Karla's lawn. Karla is willing to pay Roland to mow her lawn, but Roland will decline her offer. Roland is willing to mow Karla's lawn, but Karla will decide to mow her own lawn. Roland and Karla still can engage in a mutually-agreeable trade.
Roland and Karla still can engage in a mutually-agreeable trade.
Which of the following combinations will maximize the deadweight loss from a tax? Supply1 and Demand1 Supply2 and Demand2 Supply1 and Demand2 Supply2 and Demand1
Supply2 and Demand2
Which of the following is a disadvantage of government provision of a public good? The government lacks information about the value people place on the good. The government does not provide enough of any public good. The private sector can provide all public goods at a lower cost. There are no disadvantages of government provision of a public good.
The government lacks information about the value people place on the good.
Which of the following is not a reason why government agencies subsidize basic research? The private market devotes too few resources to basic research. The general knowledge developed through basic research can be used without charge. The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies. The government wants to attract the brightest researchers away from private research firms.
The government wants to attract the brightest researchers away from private research firms.
The vertical distance between points A and B represents a tax in the market. Refer to Figure 8-3. Which of the following statements is correct? Total surplus before the tax is imposed is $500. After the tax is imposed, consumer surplus is 45 percent of its pre-tax value. After the tax is imposed, producer surplus is 45 percent of its pre-tax value. Total surplus after the tax is imposed is $500.
Total surplus after the tax is imposed is $500.
Walter used to work as a high school teacher for $40,000 per year but quit in order to start his own painting business. To invest in his painting business, he withdrew $20,000 from his savings, which paid 3 percent interest, and borrowed $30,000 from his uncle, whom he pays 3 percent interest per year. Last year Walter paid $25,000 for supplies and had revenue of $60,000. Walter asked Tyler the accountant and Greg the economist to calculate his painting business's costs. Tyler says his costs are $25,900, and Greg says his costs are $66,500. Tyler says his costs are $25,000, and Greg says his costs are $65,000. Tyler says his costs are $66,500, and Greg says his costs are $66,500. Tyler says his costs are $75,000, and Greg says his costs are $41,500.
Tyler says his costs are $25,900, and Greg says his costs are $66,500.
Refer to Figure 8-5. Graph (a) and Graph (b) each illustrate a $4 tax placed on a market. In comparison to Graph (a), Graph (b) illustrates which of the following statements? When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic. When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic. When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic. When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.
When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic.
A state-owned bridge is always a public good, whether or not it is congested. a public good when it is congested, but it is a common resource when it is not congested. a common resource when it is congested, but it is a public good when it is not congested. always a common resource, wh
a common resource when it is congested, but it is a public good when it is not congested.
A toll on a congested road is in essence an interstate highway subsidy. a hidden tax. a gasoline tax. a corrective tax.
a corrective tax.
Suppose that for a particular business there are no implicit costs. Then accounting profit will be greater than economic profit. accounting profit will be the same as economic profit. accounting profit will be less than economic profit. the relationship between accounting profit and economic profit cannot be determined without more information.
accounting profit will be the same as economic profit.
A firm that wants to achieve economies of scale could do so by assigning limited tasks to its employees, so they can master those tasks. employing a smaller number of workers. producing a smaller quantity of output. producing an output level higher than the efficient scale.
assigning limited tasks to its employees, so they can master those tasks.
Marginal cost is equal to average total cost when average variable cost is falling. average fixed cost is rising. marginal cost is at its minimum. average total cost is at its minimum.
average total cost is at its minimum.
When marginal cost is less than average total cost, marginal cost must be falling. average variable cost must be falling. average total cost is falling. average total cost is rising.
average total cost is falling.
Governments can improve market outcomes for public goods but not common resources. common resources but not public goods. both public goods and common resources. neither public goods nor common resources
both public goods and common resources.
Knowledge that is patented is a public good, whereas knowledge that is not patented is a common resource. private good, whereas knowledge that is not patented is a club good. common resource, whereas knowledge that is not patented is a private good. club good, whereas knowledge that is not patented is a public good.
club good, whereas knowledge that is not patented is a public good.
Goods that are rival in consumption include both club goods and public goods. public goods and common resources. common resources and private goods. private goods and club goods.
common resources and private goods.
Goods that are rival in consumption but not excludable would be considered club goods. common resources. public goods. private goods.
common resources.
To fully understand how taxes affect economic well-being, we must assume that economic well-being is not affected if all tax revenue is spent on goods and services for the people who are being taxed. compare the taxes raised in the United States with those raised in France. compare the reduced welfare of buyers and sellers to the amount of revenue the government raises. remember that taxes reduce the welfare of buyers, increase the welfare of sellers, and raise government revenue.
compare the reduced welfare of buyers and sellers to the amount of revenue the government raises.
Before considering any public project, the government should only measure the total benefits of the project. only measure the cost of the project. conduct a cost-benefit analysis and compare the total cost and total benefits of the project. infer that citizens who vote for a project are willing to pay equally for it.
conduct a cost-benefit analysis and compare the total cost and total benefits of the project.
Suppose the government imposes a tax of P' - P'''. The area measured by J represents consumer surplus after the tax. consumer surplus before the tax. producer surplus after the tax. producer surplus before the tax.
consumer surplus after the tax.
If the government decides to build a new community center, the first step would be to conduct a study to determine the value of the project. The study is called a budget analysis. project analysis. reimbursement analysis. cost-benefit analysis.
cost-benefit analysis.
A tax of $0.25 is imposed on each bag of potato chips that is sold. The tax decreases producer surplus by $600 per day, generates tax revenue of $1,220 per day, and decreases the equilibrium quantity of potato chips by 120 bags per day. The tax decreases consumer surplus by $645 per day. decreases the equilibrium quantity from 6,000 bags per day to 5,880 bags per day. decreases total surplus from $3,000 to $1,800 per day. creates a deadweight loss of $15 per day.
creates a deadweight loss of $15 per day.
The decrease in total surplus that results from a market distortion, such as a tax, is called a wedge loss. revenue loss. deadweight loss. consumer surplus loss.
deadweight loss.
Figure 8-2 The vertical distance between points C and D represents a tax in the market. Refer to Figure 8-2. The imposition of the tax causes the quantity sold to increase by 2 units. decrease by 2 units. increase by 4 units. decrease by 4 units.
decrease by 2 units.
The marginal products of hiring additional workers are increasing at an increasing rate. increasing at a decreasing rate. decreasing. constant.
decreasing.
A tax levied on the buyers of a good shifts the demand curve downward (or to the left). supply curve upward (or to the left). supply curve downward (or to the right). demand curve upward (or to the right).
demand curve downward (or to the left).
If long-run average total cost decreases as the quantity of output increases, the firm is experiencing economies of scale. diseconomies of scale. coordination problems arising from the large size of the firm. fixed costs greatly exceeding variable costs.
economies of scale.
Private goods are both excludable and nonrival in consumption. nonexcludable and rival in consumption. excludable and rival in consumption. nonexcludable and nonrival consumption.
excludable and rival in consumption.
A firm's opportunity costs of production are equal to its explicit costs only. implicit costs only. explicit costs + implicit costs. explicit costs + implicit costs + total revenue.
explicit costs + implicit costs.
In the short run, a firm that produces and sells house paint can adjust where to produce along its long-run average-total-cost curve. the size of its factories. how many workers to hire. the location of its factory.
how many workers to hire.
The imposition of the tax causes the price paid by buyers to decrease by $6. increase by $6. decrease by $4. increase by $4.
increase by $6.
When a country is on the downward-sloping side of the Laffer curves, a cut in the tax rate will decrease tax revenue and decrease the deadweight loss. decrease tax revenue and increase the deadweight loss. increase tax revenue and decrease the deadweight loss. increase tax revenue and increase the deadweight loss.
increase tax revenue and decrease the deadweight loss.
Private decisions about consumption of common resources and production of public goods usually lead to an efficient allocation of resources and external effects. efficient allocation of resources and no external effects. inefficient allocation of resources and external effects. inefficient allocation of resources and no external effects.
inefficient allocation of resources and external effects.
The Social Security tax is a tax on capital. labor. land. savings.
labor.
Economies of scale occur when long-run average total costs rise as output increases. long-run average total costs fall as output increases. average fixed costs are falling. average fixed costs are constant.
long-run average total costs fall as output increases.
Average total cost is increasing whenever total cost is increasing. marginal cost is increasing. marginal cost is less than average total cost. marginal cost is greater than average total cost.
marginal cost is greater than average total cost.
If marginal cost is rising, average variable cost must be falling. average fixed cost must be rising. marginal product must be falling. marginal product must be rising.
marginal product must be falling.
If the size of a tax increases, tax revenue increases. decreases. remains the same. may increase, decrease, or remain the same.
may increase, decrease, or remain the same.
If a highway is congested, then use of that highway by an additional person would lead to a negative externality. positive externality. Pigovian externality. free-rider problem with rush-hour drivers stuck in traffic.
negative externality.
The U.S. military defends Ngoc from foreign conflict. The fact that Ngoc enjoys this protection does not detract from other Americans' enjoyment of it. For this reason, we say that national defense is excludable. not excludable. rival in consumption. not rival in consumption.
not rival in consumption
A television broadcast is an example of a good that is private not rival in consumption. social. excludable.
not rival in consumption.
Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good. overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good. understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good. understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs t
overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
For most goods in an economy, the primary signal that guides the decisions of buyers and sellers is advertising. quality. reputation. price.
price.
Because of the free-rider problem private markets tend to undersupply public goods. the federal government spends too many resources on national defense and not enough resources on medical research. firework displays provided by private markets have become increasingly popular. poverty can easily be eliminated through private charity
private markets tend to undersupply public goods.
Because of the free-rider problem, private markets tend to undersupply public goods. the federal government spends too many resources on national defense and not enough resources on medical research. firework displays provided by private markets have become increasingly popular. poverty can easily be eliminated through private charity.
private markets tend to undersupply public goods.
Suppose the government imposes a tax of P'-P'''. The area measured by L + M + Y represents consumer surplus after the tax. consumer surplus before the tax. producer surplus after the tax. producer surplus before the tax.
producer surplus before the tax.
Suppose the federal government doubles the gasoline tax. The deadweight loss associated with the tax also doubles. triples. quadruples. rises by a factor of 8.
quadruples.
For a good that is taxed, the area on the relevant supply-and-demand graph that represents government's tax revenue is smaller than the area that represents the loss of consumer surplus and producer surplus caused by the tax. bounded by the supply curve, the demand curve, the effective price paid by buyers, and the effective price received by sellers. a right triangle. a triangle, but not necessarily a right triangle.
smaller than the area that represents the loss of consumer surplus and producer surplus caused by the tax.
Suppose the government imposes a tax of P'-P'''. The area measured by K + L represents tax revenue. consumer surplus before the tax. producer surplus after the tax. total surplus before the tax.
tax revenue.
The overuse of a common resource relative to its economically efficient use is called the free-rider problem. the Tragedy of the Commons. a public good. cost-benefit analysis.
the Tragedy of the Commons.
If a firm uses labor to produce output, the firm's production function depicts the relationship between the number of workers and the quantity of output. marginal product and marginal cost. the maximum quantity that the firm can produce as it adds more capital to a fixed quantity of labor. fixed inputs and variable inputs in the short run.
the number of workers and the quantity of output.
Producers have little incentive to produce a public good because the social benefit is less than the private benefit. the social benefit is less than the social cost. there is a free-rider problem. there is a Tragedy of the Commons.
there is a free-rider problem.
What is the shape of the marginal cost curve for this firm? constant upward-sloping downward-sloping U-shaped
upward-sloping
Curve D is always declining because of diminishing marginal product. we are dividing fixed costs by higher and higher levels of output. marginal product first increases, then decreases. marginal product first decreases, then increases.
we are dividing fixed costs by higher and higher levels of output.
If a tax shifts the supply curve downward, we cannot infer anything because the shift described is not consistent with a tax. we can infer that the tax was levied on sellers of the good. we can infer that the tax was levied on both buyers and sellers of the good. we can infer that the tax was levied on buyers of the good.
we cannot infer anything because the shift described is not consistent with a tax.
It is commonly argued that national defense is a public good. Nevertheless, the weapons used by the U.S. military are produced by private firms. We can conclude that resources would be used more efficiently if the government produced the weapons. resources would be used more efficiently if private firms provided national defense. weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable. national defense is rival in consumption and excludable, but weapons are not rival in consumption and not excludable.
weapons are rival in consumption and excludable, but national defense is not rival in consumption and not excludable.
