Exhibit 7-15 Long-run average cost
In Exhibit 7-15, economies of scale exist up to:
A. 500 units of output per week.
B. 1,000 units of output per week.
C. 1,500 units of output.
D. 2,000 units of output.
Answer: B
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Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment.Pat's explicit costs are ________, and Pat's implicit costs are ________.
A. $16,000; $51,000 B. $15,000; $36,000 C. $35,000; $16,000 D. $16,000; $35,000
If the market equilibrium quantity is greater than the socially optimal quantity, one can infer that:
A. there is a positive externality associated with this good. B. the private demand curve for the activity is below the socially optimal demand. C. there is a negative externality associated with this good. D. the private supply curve for the activity is to the left of the socially optimal supply curve.