1 Which of the following is NOT an externality associated with the production of electricity from fossil fuels a soot that is deposited on the cars of nearby homeowners b climate damage c respiratory disease caused by air pollution d higher wages as a result of the increase in demand for labour 2 When average total cost is decreasing as output expands, what can we conclude a that total fixed costs must be increasing b that average variable cost must be falling c that average fixed cost must be increasing d that marginal cost must be less than average total cost 3 For a perfectly competitive firm in short run equilibrium, if the price is between AVC and ATC, which of the following can we conclude a) The economic profits will be negative b) The firm will not produce c) The accounting profits will be negative d) The loss will be equal to total fixed costs 4 A firm is operating at a scale where diseconomies of scale are present Why is the firm NOT operating efficiently a The firm is operating at a scale where total fixed costs are not minimized b The firm is operating at a scale where the average total cost of production is falling as output expands c The firm has grown so large that average total cost increases as output expands d The firm is operating at a scale where average fixed costs are not as low as possible 5 At her current level of output, a monopolist has an MR of $30, an MC of $26, and an economic profit of zero If the market demand curve is downward sloping and her marginal cost curve is upward sloping, what can we conclude about the monopolist a She could increase profit by increasing her price b She is producing at the profit maximizing level of output c She should exit the market if significant fixed costs have been incurred d She could increase profit by increasing output 6 How will a profit maximizing firm in a perfectly competitive market react to a decrease in the short run market demand curve a) It will sell capital to decrease its output b) It will increase output because some firms will leave the industry c) It will decrease output because the marginal revenue curve shifts downwards d) It will not react because its demand curve is perfectly elastic 7 Why are negative externalities difficult to measure in practice a because most external costs are nonpecuniary in nature b because the marginal value of cleaner air is close to zero c because the effects of pollution are subjective in nature d because some resources are owned by society and therefore have no opportunity cost

Question

1  Which of the following is NOT an externality associated with the production of electricity from fossil fuels  a soot that is deposited on the cars of nearby homeowners b climate damage c respiratory disease caused by air pollution d higher wages as a result of the increase in demand for labour 2  When average total cost is decreasing as output expands, what can we conclude  a that total fixed costs must be increasing b that average variable cost must be falling c that average fixed cost must be increasing d that marginal cost must be less than average total cost 3  For a perfectly competitive firm in short run equilibrium, if the price is between AVC and ATC, which of the following can we conclude  a) The economic profits will be negative  b) The firm will not produce  c) The accounting profits will be negative  d) The loss will be equal to total fixed costs  4  A firm is operating at a scale where diseconomies of scale are present  Why is the firm NOT operating efficiently  a The firm is operating at a scale where total fixed costs are not minimized  b The firm is operating at a scale where the average total cost of production is falling as output expands  c The firm has grown so large that average total cost increases as output expands  d The firm is operating at a scale where average fixed costs are not as low as possible  5  At her current level of output, a monopolist has an MR of $30, an MC of $26, and an economic profit of zero  If the market demand curve is downward sloping and her marginal cost curve is upward sloping, what can we conclude about the monopolist  a She could increase profit by increasing her price  b She is producing at the profit maximizing level of output  c She should exit the market if significant fixed costs have been incurred  d She could increase profit by increasing output  6  How will a profit maximizing firm in a perfectly competitive market react to a decrease in the short run market demand curve  a) It will sell capital to decrease its output  b) It will increase output because some firms will leave the industry  c) It will decrease output because the marginal revenue curve shifts downwards  d) It will not react because its demand curve is perfectly elastic  7  Why are negative externalities difficult to measure in practice  a because most external costs are nonpecuniary in nature b because the marginal value of cleaner air is close to zero c because the effects of pollution are subjective in nature d because some resources are owned by society and therefore have no opportunity cost

Accepted Answer

The Answer is in the image, click to view ...

a	The firm is operating at a scale where total fixed costs are not minimized.
b	The firm is operating at a scale where the average total cost of production is falling as output expands.
c	The firm has grown so large that average total cost increases as output expands.
d	The firm is operating at a scale where average fixed costs are not as low as possible.

a	She could increase profit by increasing her price.
b	She is producing at the profit-maximizing level of output.
c	She should exit the market if significant fixed costs have been incurred.
d	She could increase profit by increasing output.

Question

1. Which of the following is NOT an externality associated with the production of electricity from fossil fuels? a soot that is deposited on the

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

International Marketing

Students also viewed these Economics questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

a	soot that is deposited on the cars of nearby homeowners
b	climate damage
c	respiratory disease caused by air pollution
d	higher wages as a result of the increase in demand for labour

a	that total fixed costs must be increasing
b	that average variable cost must be falling
c	that average fixed cost must be increasing
d	that marginal cost must be less than average total cost

a	because most external costs are nonpecuniary in nature
b	because the marginal value of cleaner air is close to zero
c	because the effects of pollution are subjective in nature
d	because some resources are owned by society and therefore have no opportunity cost