If a firm has a total fixed cost of $75 and an average variable cost of $35 for producing 10 units of output, the average total cost would be:

A firm that produces chemical solvents creates some air pollution because of the emissions from its manufacturing facilities. A tax is imposed on the firm, equal to the costs of environmental damage caused by a unit of the emissions. What is the result?

A) The quantity of chemical solvents produced now will be the efficient amount. B) Demand for the chemical solvents will increase. C) Demand for the chemical solvents will decrease. D) Consumers of the chemical solvents will be willing to pay the full amount of the tax, and so the quantity produced will be unaffected.

Which of the following statements is false?

A. Critics feel that wage and price controls interfere with the price mechanism. B. Sweden has one of the world's most equal distributions of income, but also has a relatively low standard of living. C. In the former Soviet Union, most of the crops were produced on collective farms. D. The price system is based on supply and demand.