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Unformatted text preview: nd it advisable to shut down rather than continue operating if at the quantity where ___________________, total revenue is ______________ total variable cost. a. price equals marginal cost, less than b. marginal cost equals average variable cost, less than c. price equals marginal cost, more than d. marginal cost equals average variable cost, more than e. none of the above 18. When Chapel Hill reduced the fare for riding the city bus to zero, it observed two interesting phenomena. At 7:10 and 8:10 am, the buses were circulating with 50 percent of the seats empty. At 7:40 and 8:40 am, there were twice as many riders as could get onto each bus headed to or around campus. Then the riders adjusted; some of the riders shifted to the earlier buses, so that all these buses were full. Two questions: Does this represent an equilibrium in the market for bus rides? Is riding the bus free for all riders? a. Yes; Yes. b. Yes; No – there is an opportunity cost to riding the earlier bus for those who ride it. c. No; Yes. Midterm One, Economics 101.007, Fall 2011 5 Price in US dollars d. No; No – there is an opportunity cost to riding the earlier bus for those who ride it. e. None of the above. 19. The Wall Street Journal editorial on teen unemployment suggested...
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This note was uploaded on 02/06/2014 for the course ECONOMICS 101 taught by Professor Byrns during the Spring '09 term at UNC.
- Spring '09