As output increases, total cost ________, total fixed cost ________, and total variable cost ________.
A) increases; increases; increases
B) increases; increases; does not change
C) increases; does not change; increases
D) does not change; increases; increases
Ques. 2If the four-firm concentration ratio for an industry equals 100 percent, then definitely
A) the Herfindahl-Hirschman Index (HHI) equals 10,000.
B) the industry is a monopoly.
C) a small number of firms are in the industry.
D) there are no barriers to entry into the industry.
Ques. 3Pablo must choose among options A, B, and C. Option A gives him 10,000 for sure. Option B gives him 4,000 with probability 0.5 or 16,000 with probability 0.5. Option C gives him 8,000 with probability 0.5 or 12,000 with probability 0.5.
If he receives diminishing marginal utility from wealth, Pablo will A) choose option A.
B) choose option B.
C) choose option C.
D) be indifferent among options A, B, and C.
Ques. 4The figure above shows the market for milk in Cowland. If a subsidy paid to producers of 1 per gallon of milk is introduced, what is the amount, including the subsidy, that suppliers keep per gallon?
A) 3.00 a gallon
B) between 3.00 and 4.00 per gallon
C) 4.00 a gallon
D) between 4.00 and 5.00 per gallon
Ques. 5If a public good was left to be provided by the private sector
A) more than the efficient quantity would be produced.
B) less than the efficient quantity would be produced
C) the efficient quantity would be produced
D) the good would be provided at a very low price.
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