An increase in advertising costs affect a firm in a monopolistic competition by increasing the firm's
A) total fixed cost.
B) marginal cost.
C) total variable cost.
D) average variable cost.
Ques. 2Which of the following shifts the AVC curve upward at Barney's Bagel Bakery?
A) an increase in the hourly wage that Barney pays his workers
B) a decrease in the hourly wage that Barney pays his workers
C) an increase in the fixed amount of liability insurance premiums that Barney pays for his business
D) Both answers A and C are correct.
Ques. 3Economists generally agree that increases in the minimum wage increase employment.
Indicate whether the statement is true or false
Ques. 4The banking system has just experienced an increase in deposits of 50,000. The currency drain ratio is 20 percent and the desired reserve ratio is 10 percent. What does the money multiplier equal?
A) 4.00
B) 3.33
C) 0.25
D) 10.00
Ques. 5The amount of the external marginal cost per ton illustrated in the above figure is
A) 8.00 per ton.
B) 12.00 per ton.
C) 16.00 per ton.
D) zero because no external cost is illustrated.
Ques. 6Producer surplus is the price of a good minus the opportunity cost of producing it, summed over the quantity produced.
Indicate whether the statement is true or false
Ques. 7Which of the following is necessary for a monopolist to price discriminate between groups?
A) The groups are identifiable.
B) The groups have different willingness to pay.
C) A customer from one group cannot resell to a customer in another group.
D) All of the above conditions are necessary for the monopolist to price discriminate.
Ques. 8What is the principal-agent problem as applied to corporations?
What will be an ideal response?
Ques. 9The use of incentive payments for salespeople combats
A) both adverse selection and moral hazard.
B) neither adverse selection nor moral hazard.
C) adverse selection but not moral hazard.
D) moral hazard but not adverse selection.
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