December 2020

Vaccination shots provide __, whichmeans sellers devote too few resources to produce this product. Two basic solutions to this type of market failure are laws to require consumption of shots and special subsidies.

Will each of the following changes in price cause total revenue to increase, decrease, or remain unchanged? a. Price falls, and demand is elastic. b. Price rises, and demand is elastic. c. Price falls, and demand is unitary elastic. d. Price rises, and demand is unitary elastic. e. Price falls, and demand is inelastic. f.

Assume that a consumer’s preference is for two goods, X and Y in Exhibit A-6. By holding the price of Y and money income constant while varying the price of X, it is possible to derive a. the demand curve for X. b. the demand curve for Y. c. the demand curve for both X and Y. d. none of the above. Q256: Explain why the long-run

After some level of output in the short run, each unit of the variable input yields smaller and smaller marginal product. This principle is called the _________. T F If the total variable cost of producing 5 units of output is $10 and the total variable cost of producing 6 units is $15, the marginal

Which of the following statements is false?a. TC = TFC _+TVC. b. AVC = ATC – AFC. c. AFC _=TFC/Q. d. MC equals the change in ATC divided by the change in Q. e. ATC =TC/Q.

Explicit costs are payments to a. hourly employees. b. insurance companies. c. utility companies. d. all of the above.

Implicit costs are the opportunity costs of using the resources of a. outsiders. b. owners. c. banks. d. retained earnings.

Consider Exhibit 14, which shows the graph of a perfectly competitive firm in the short run. a. If the firm’s demand curve is MR3, does the firm earn an economic profit or incur a loss? b. Which demand curve(s) indicates the firm incurs a loss? c. Which demand curve(s) indicates the firm would shut down? d.

The owner of a restaurant will hire waiters if the a. additional labor’s pay is close to the minimum wage. b. marginal product is at the maximum. c. additional work of the employees adds more to total revenue than to costs. d. waiters do not belong to a union.

A union can influence the equilibrium wage rate by a. featherbedding. b. requiring longer apprenticeships. c. favoring trade restrictions on foreign products. d. all of the above. e. none of the above.