1 - EXAM 2 Multiple Choice Identify the letter of the...

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EXAM 2 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. An externality exists when a. the government intercedes in the operation of private markets by forcing the market to ad- just to the balance of supply and demand. b. markets are not able to reach equilibrium. c. a firm sells its product in a foreign market. d. a person engages in an activity that influences the well-being of a bystander and yet neither pays nor receives payment for that effect. ____ 2. Goods that are both excludable and rival would be considered a. natural monopolies. b. common resources. c. public goods. d. private goods. ____ 3. A natural monopoly is a. excludable but not rival. b. rival but not excludable. c. both excludable and rival. d. neither excludable nor rival. ____ 4. If a firm produces nothing, which of the following costs will be zero? a. total cost b. fixed cost c. opportunity cost d. variable cost
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The graph below depicts the cost structure for a firm in a competitive market. Use the graph to answer the follow- ing questions. Figure 14-1 Note: On the above diagram, change the vertical-axis labels from MC 1 to P 1 , MC 2 to P 2 , etc. ____ 5.
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This test prep was uploaded on 04/14/2008 for the course ECO 111 taught by Professor Fox-kean during the Spring '08 term at Austin College.

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1 - EXAM 2 Multiple Choice Identify the letter of the...

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