The supply of land is :

The supply of land is
 
  A) perfectly elastic.
  B) elastic, but not perfectly elastic.
  C) perfectly inelastic.
  D) inelastic, but not perfectly inelastic.

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Ques. 2

If Dell Computer Company could produce more computers at lower long-run average cost by increasing the quantity of all the inputs it uses, Dell definitely would experience
 
  A) decreasing marginal returns.
  B) diseconomies of scale.
  C) increasing marginal returns.
  D) economies of scale.

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Ques. 3

What does it mean to be risk averse?
 
  What will be an ideal response?

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Ques. 4

When long-run average cost decreases as output increases, there are definitely I. increasing marginal returns. II. economies of scale.
 
  A) only I
  B) only II
  C) both I and II
  D) neither I nor II

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Ques. 5

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?
 
  A) proportional income tax
  B) regressive income tax
  C) flat-rate income tax
  D) progressive income tax

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Ques. 6

Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of 2/inhaler.
 
  The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if Prime Pharmaceuticals operates as a single-price monopoly, then there will be a deadweight loss equal to A) 24 million.
  B) zero.
  C) 16 million.
  D) 32 million.

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Ques. 7

Define the efficient scale of production. For the situation of a firm in monopolistic competition, discuss its excess capacity.
 
  What will be an ideal response?

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Ques. 8

The HPV vaccine protects against human papillomavirus (HPV) that causes cancer. It protects both the person getting the vaccine and the sexual partners of that person. In a private market with no government intervention, the equilibrium will be
 
  A) overprovision of the HPV vaccine and a deadweight loss.
  B) overprovision of the HPV vaccine but no deadweight loss.
  C) underprovision of the HPV vaccine but no deadweight loss.
  D) underprovision of the HPV vaccine and a deadweight loss.

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Ques. 9

Other things being equal, a technological change that raises the value of marginal product of capital raises the rental rate of capital because the
 
  A) supply curve of capital shifts leftward.
  B) supply curve of capital shifts rightward.
  C) demand curve for capital shifts rightward.
  D) demand curve for capital shifts leftward.

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Ques. 10

What is expected utility?
 
  What will be an ideal response?