8. As output increases, average fixed cost: A. Increases B. Decreases C. Remain constant D. First increases and then decreases 9. In the long run a firm will choose a plant size that has the: A. Minimum of average fixed costs B. Capacity to produce the largest quantity of the product C. Minimum average total cost of producing the target level of output D. Maximum level of resource use per unit of the total product of output 10. The diamond water paradox illustrates: A. the difference between value in exchange of a good and it's value in use.stantially greater B. B. the idea that diamonds may be expensive but water can be too. C. the economic principle that individuals usually prefer diamonds over water. D. the idea that individuals may not be rational when it comes to buying diamonds. 11. The following are major observations made by behavioral economists regarding human behavior, except: A. Workers tend to spend and consume too much in the present, thus not saving enough for retirement B. People tend to stick with the default option when faced with various alternatives C. People behave in ways that seem irrational at first glance D. People often intentionally act in irrational ways 12. When a firm is experiencing economies of scale: A. Minimum efficient scale has been achieved B. Long-run average total cost is decreasing C. An increase in output is accompanied by a more-than-proportionate increase in long-run total cost D. A given percentage increase in output requires a more-than-proportionate increase in resources 13. When marginal product is at its maximum: A. marginal cost is at its minimum. B. average total cost is also at its maximum. C. total variable cost is at its minimum. D. average fixed cost is approaching its maximum. 14. Prospect theory in behavioral economics predicts that as the price of flour increases, bakeries will: A. Increase the unit prices of their products B. Reduce the unit sizes of their products C. Produce more units of their products D. Buy more flour for their products