Author Question: The key assumption required for us to use a linear variable cost function of the form VC = bq is ... (Read 93 times)

j.rubin · **on:** Jul 1, 2018

The key assumption required for us to use a linear variable cost function of the form VC = bq is that:

A) marginal cost must be constant and equal to b.
B) marginal cost must be increasing at rate b.
C) fixed costs must be zero.
D) marginal cost is always greater than average variable cost.

Question 2

If households pay a fixed annual fee for trash disposal,

A) households will all tend to produce the same amount of garbage.
B) households have no incentive to cut back on the amount of garbage they generate.
C) that fee will provide households with an incentive to cut back on the amount of garbage they generate.
D) that fee will discourage households from throwing out reusable materials.
E) that fee will discourage households from throwing out toxic or otherwise harmful materials.