When economies of scale are present, the LRAC curve touches each short-run ATC curve
A) to the left of the ATC curve's minimum point.
B) to the right of the ATC curve's minimum point.
C) at the ATC curve's minimum point.
D) at no points.
Ques. 2In an ad for insurance, the text reads Life's an adventure, and there are plenty of perils awaiting your jewelry: a lost or broken stone, theft, accidental loss, damage, mysterious disappearance Have you thought about insurance?
What is the economic reasoning for an individual to buy insurance?
A) Individuals who buy insurance are profit maximizers.
B) Individuals who buy insurance are rational.
C) Individuals who buy insurance are dishonest and can profit from dishonesty.
D) Individuals who buy insurance increase their expected utility by owning insurance.
Ques. 3Education in the United States is heavily subsidized by the government. This fact suggest that
I. less than the efficient amount of education would be provided by an unregulated market.
II. the marginal social benefit of education is greater than marginal social cost of education.
A) I only
B) II only
C) both I and II
D) neither I nor II
Ques. 4In the figure above, if the market is a single-price monopoly rather than a perfectly competitive industry, the transfer of consumer surplus from consumers to the producer is the area of
A) trapezoid beic.
B) triangle abe.
C) rectangle begd.
D) rectangle befc.
Ques. 5Consider the budget line labeled RT in the above figure. What would shift the budget line to RS?
A) a rise in the price of good X
B) a fall in the price of good X
C) a rise in the price of good Y
D) a fall in the price of good Y
Ques. 6Which of the following is a recent trend in the labor market?
A) Low-skilled workers have lost jobs.
B) The demand for high-skilled labor has increased as technology has increased.
C) The wages of high-skilled labor have decreased.
D) The marginal productivity of low-skilled workers has increased.
Ques. 7How do the characteristics of perfect competition and monopolistic competition differ?
What will be an ideal response?
Ques. 8A firm is operating in its range of economies of scale and is on both its LRAC curve and its short-run ATC curve. At that level of output, the slope of its LRAC curve is
A) zero and the slope of its ATC curve is zero.
B) zero and the slope of its ATC curve is negative.
C) negative and the slope of its ATC curve is zero.
D) negative and the slope of its ATC curve is negative.
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