The long-run average cost curve shows
A) the lowest average cost of producing every level of output in the long run.
B) where the most profitable level of output occurs.
C) the average cost of producing where diminishing returns are not present.
D) the plant size or scale that the firm should build.
Answer: A
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The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, what happens if the government imposes a $20 per firm tax on firms that service this route?
A) Neither firm has a dominant strategy. B) Not entering is a dominant strategy for both firms. C) Neither firm entering is a Nash equilibrium. D) Only firm A will enter.
When the price level rises, the number of dollars needed to buy a representative basket of goods
a. increases, and so the value of money rises. b. increases, and so the value of money falls. c. decreases, and so the value of money rises. d. decreases, and so the value of money falls