If a monopolistically competitive firm has excess capacity
A) it is experiencing diseconomies of scale.
B) it produces a level of output that places it on the negatively sloped portion of its average total cost curve.
C) it is producing beyond the minimum efficient scale.
D) it has exhausted all economies of scale.
B
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The January effect
A) largely disappeared after receiving attention in the 1980s. B) refers to the gap between futures prices and the prices of the underlying securities that occurs each January. C) was stronger during the 1980s than during previous decades. D) is the observation that stocks tend to be sold off in January.
If the production of a particular good involves significant external benefits, to force the externality to be internalized the government might:
a. impose a tax on production of the good in order to increase production. b. impose a tax on production of the good in order to decrease production. c. offer a subsidy for production of the good in order to increase production. d. offer a subsidy for production of the good in order to decrease production.