Question:

Answer: C) true, because firms would have a greater incentive to adopt new technology that causes less pollution.

Question:

Answer: c) Incorrect. High sports salaries contain “economic rent” and would not be so high if the public were unwilling to buy tickets at the high prices.

Question:

Answer: a) Water has a high total utility, but a low marginal utility .

Question:

Answer: b) there are many close substitutes for its product.

Question: A firm is most likely to monopolize a market whenever:

a) it has a U-shaped average total cost curve.

b) fixed capital costs are small relative to total costs.

c) economies of scale are large relative to market demand.

d) the income elasticity of demand is high for the firm’s product.

Answer: c) economies of scale are large relative to market demand.

Question:

Answer: d) restrict output to levels at which their products are valued more than the marginal cost of producing them

Question:

Answer: d) movement along the demand curve for oranges and a shift in the demand curve for apples.

Question:

Answer: d) people with high incomes tend to spend a larger proportion of their incomes on gasoline than people with low incomes.

Question:

Answer: a) produce the quantity of output at which marginal cost equals price.

Question:

Answer: a) supply of the product will decrease.