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Question

A perfectly competitive firm will incur an economic loss but will continue producing the profit-maximizing quantity of output in the short run if price is:

less than marginal cost

less than average variable cost

greater than average total cost

greater than average variable cost and less than average total cost

When a nation experiences economic growth:

its production possibilities curve shifts outward.

its production possibilities curve shifts inward.

it has been able to reach full employment.

it has moved to a more consumer-oriented position on its production possibilities curve

The additional cost of pollution is the additional cost imposed on society as a whole by an additional unit of pollution is:

the marginal social benefit of pollution

the marginal social cost of pollution

the optimal Pigouvian tax

none of the above

Answer 1

greater than average variable cost and less than average total cost

its production possibilities curve shifts outward.

the marginal social cost of pollution

Answer 2

A perfectly competitive firm will incur an economic loss but will continue producing the profit-maximizing quantity of output in the short run if price is:

greater than average variable cost and less than average total cost ( the firm needs to cover at least the variable costs to remain in business, it can hope to recover fixed costs in the longrun)

When a nation experiences economic growth:

its production possibilities curve shifts outward.

The additional cost of pollution is the additional cost imposed on society as a whole by an additional unit of pollution is:

the marginal social cost of pollution