Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your total cost (in dollars) is given by the equation TC = 300 + 10Q, where Q represents the number of t-shirts you make. Your fixed cost is $________, and your marginal cost is $________.

The government sometimes creates an excess demand for a product by setting a maximum price at which the product may be sold to consumers. This is sometimes called a

A) subsidy. B) price floor. C) tax. D) price ceiling.

Assume that emissions from electric utilities contribute to pollution in the form of acid rain. Which of the following describes how this affects the market for electricity?

A) The equilibrium in the market is not efficient; consumer surplus is equal to producer surplus. B) The equilibrium in the market is not efficient; because of the cost of the acid rain, economic efficiency would be greater if more electricity were produced. C) A deadweight loss occurs; at equilibrium the additional social cost of production is greater than the additional benefit to consumers. D) The equilibrium in the market is not efficient; the marginal benefit from electricity is greater than the marginal social cost.