21

1. Average fixed cost always decreases.
2. True
3. False

QUESTION 22

1. If the demand for mass transit is inelastic, then increasing fares will increase mass transit revenues.
2. True
3. False

QUESTION 23

1. An expansion can be illustrated by the movement from one combination on the PPF to another point on the frontier.
2. True
3. False

QUESTION 24

1. If a price ceiling is imposed below the equilibrium price then _____.
2. A.the market can still reach equilibriumB.excess supply is createdC.demand will decreaseD.supply will increaseE.excess demand is created

QUESTION 25

1. Rent controls are one of a handful of examples of a price floor.
2. True
3. False

QUESTION 26

1. Both monopoly and monopolistic competition share which of the following?
2. A.Downward-sloping demand curveB.No significant barriers to entry or exitC.Strategic interdependenceD.None of these

QUESTION 27

1. The price elasticity of demand measures which of the following?
2. A.responsiveness of price to a change in quantity suppliedB.responsiveness of quantity demanded to a change in priceC.responsiveness of price to a change in quantity demandedD.adaptability of buyers to changes in demandE.responsiveness of quantity demanded to a change in quantity supplied

QUESTION 28

1. The total cost to a firm of producing zero output is _____.
2. A.zero in both the short and long runB.its total fixed cost in short run and zero in long runC.its fixed cost in long run and zero in short runD.its fixed cost in both the short and long runE.its total variable cost in both the short and long run

QUESTION 29

1. Perfectly inelastic demand occurs when the demand curve is vertical.
2. True
3. False

QUESTION 30

1. The increase in total cost from one more unit of output is ____.
2. A.total variable costB.marginal fixed costC.marginal variable costD.marginal cost