14. At 100 units of output, total cost is $30,000 and total variable cost is $14

Question

14. At 100 units of output, total cost is $30,000 and total variable cost is $14,000. What does average fixed cost equal at 100 units? (Points : 2)
$300
$160
$140
$16,000


15. A 2004 article written immediately after the re-election of George W. Bush referred to his environmental policy as "a system where power plants buy and sell the right to pollute in the form of emission credits." The text classifies this approach as: (Points : 2)
a voluntary program.
direct regulation.
a tax incentive program.
a market incentive program.


16. If government regulators want a natural monopolist to earn only zero economic profit, then they will set price equal to: (Points : 2)
marginal cost (MC).
average variable cost (AVC).
average fixed cost (AFC).
average total cost (ATC).


17. Suppose a perfectly competitive firm can increase its profits by reducing its output. Then it must be the case that the firm's: (Points : 2)
marginal revenue equals its marginal cost.
price exceeds its marginal cost.
price exceeds its marginal revenue.
marginal cost exceeds its marginal revenue.


18. The marginal cost curve intersects the average fixed cost curve at its minimum point. (Points : 2)
True
False


19. A firm in a monopolistically competitive industry will produce an output level at which (Points : 2)
P < MR.
P = MR.
P > MR.
P = MC.

Explanation / Answer

14. ans--$160 15. ans--a tax incentive program. 16. ans--average variable cost (AVC) 17. ans--price exceeds its marginal cost. 18. ans--False 19. ans--P > MR. 20. ans--government antitrust policies. 21. ans--significant barriers to entry. 22. ans--decrease and employment to increase.

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