Question 1
Refer to the information provided in Figure 12.1 below to answer the question(s) that follow.
Refer to Figure 12.1. This competitive firm is currently at Point
B on the
ATC curve. The firm's move toward an output where
ATC will be at point
A will make the economy
◦ more fair and the distribution of outcome more equitable.
◦ more stable.
◦ less efficient.
◦ less stable.
Question 2
Refer to the information provided in Figure 12.1 below to answer the question(s) that follow.
Refer to Figure 12.1. The firm is
◦ equally efficient when it produces at points
A and
B.
◦ less efficient when it produces at point
A than at point
B.
◦ less efficient when it produces at point
B than at point
A.
◦ producing at least possible cost anywhere along the given
ATC curve.
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