When a firm experiences economies of scale, its ________ cost curve slopes ________ as output ...

When a firm experiences economies of scale, its ________ cost curve slopes ________ as output increases.
 
  A) long-run average; downward
  B) short-run average total; downward
  C) short-run marginal cost; downward
  D) long-run average; upward

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Ques. 2

Pirates have been intensely attacking ships off the shore of Somalia this year. Boat owners have reportedly coughed up more than 30 million in ransom and insurance premiums have shot up.
 
  The pirate activity and increase in premiums means that the expected wealth of boat owners who sail near Somalia is ________. A) decreasing
  B) increasing
  C) staying the same
  D) decreasing only if they have insurance

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Ques. 3

How does a firm in monopolistic competition determine its price and quantity? What type of profit can it make in the short run and the long run?
 
  What will be an ideal response?

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Ques. 4

Perfectly competitive firms have total control over the price they set for their product. Explain why the previous statement is correct or incorrect.
 
  What will be an ideal response?

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Ques. 5

Kristen has an income of 450 per year to spend on music CDs and movies on DVDs. Initially the price of a CD is 15 and the price of a DVD is 22.50. The indifference curves in the figure above (I1, I2, and I3 ) reflect Kristen's preferences.
 
  If the price of a DVD falls to 18, Kristen will buy A) 10 DVDs and 15 CDs per year.
  B) 15 DVDs and 12 CDs per year.
  C) 12.5 DVDs and 11 CDs per year.
  D) 13 DVDs and 15 CDs per year.

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Ques. 6

In the above table, which tax plan is regressive?
 
  A) only plan A
  B) only plan B
  C) only plan C
  D) both plan A and plan C

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Ques. 7

When the marginal social benefit of Good A is greater than the marginal private benefit of Good A, then
 
  A) competitive, unregulated markets will produce a quantity of Good A that is less than the efficient quantity.
  B) competitive, unregulated markets will produce the quantity of Good A that is equal to the efficient quantity.
  C) competitive, unregulated markets will produce a quantity of Good A that is greater than the efficient quantity.
  D) the government should levy a tax on the production of Good A that is equal to the horizontal distance between the two marginal cost curves.

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Ques. 8

Which of the following would unions be most likely to support?
 
  A) decreasing the legal minimum wage
  B) restricting immigration
  C) encouraging imports
  D) increasing the elasticity of demand for the goods their workers produce