Microeconomics

Question 6 (1 point)

If the fixed cost of a firm are cut in half, which curves will shift?

Question 6 options:

A.All the cost curves (ATC, AVC, AFC and MC) will shift down

B.AFC, ATC and AVC will shift down, the MC will stay the same

C.AFC, AVC and ATC will shift down, MC will stay the same

D.AFC and ATC will shift down, AVC and MC won't change

Question 7 (1 point)

If a good or service generates a positive externality, which following statement is correct?

Question 7 options:

A.The market will be inefficient and we should impose a tax equal to the social cost

B.The market will under-produce and we should subsidize

C.The market will over-produce and we should subsidize

D.The market will under-produce and we should tax