The question refers to the following diagram of a natural monopolist. The figure shows a graph with a horizontal axis labeled Quantity and a vertical axis labeled Price. Five quantities appear on the horizontal axis, starting to the right of the vertical axis, from left to right, and are labeled Q 1, Q 2, Q 3, Q 4, and Q 5. Four prices appear on the vertical axis and are labeled, from bottom to top and starting slightly up the vertical axis, P 1, P 2, P 3, and P 4. Four lines appear on the graph. A curved line labeled Marginal Cost begins at P 4 and to the left of Q 1, near the vertical axis. The curved line moves downward and to the right until it reaches point Q 2 and P 2. It then very steadily continues to move downwards and to the right ending slightly below P 1 and to the right of Q 5. A curved line labeled Average Total Cost begins above P 4 and to the left of Q 1, near the vertical axis. The curve lines moves downward and to the right where it crosses through points, Q 1 and P 4, and Q 4 and P 3. It then continues to move steadily down and to the right ending very slightly below P 2 and to the right of Q 5. A straight line labeled Marginal Revenue starts high above P 4 on the vertical axis. It moves steeply downwards and to the right and intersects the Average Total Cost curve at point Q 1 and P 4. It continues moving downwards until it intersects the Marginal Cost curve at Q 2 and P 2 and crosses the horizontal axis at Q 3 and ends below the horizontal axis at Q 4. A straight line labeled Demand starts at the same point as the Marginal Revenue line high above P 4 on the vertical axis. It moves steadily down and to the right and intersects the Average Total Cost curve at point Q 4 and P 3. It continues moving downwards till it intersects the Marginal Cost curve at Q 5 and P 1 and ends on the horizontal axis to the right of Q 5. If government regulated the natural monopoly to produce the output resulting in zero economic profit, then the output would be

When the demand for new homes decreases, the demand for construction workers who build homes decreases. This relationship illustrates the concept of

If a perfectly competitive industry were monopolized without any changes in cost conditions, the price and quantity produced would change in which of the following ways?

For a firm hiring labor in a perfectly competitive labor market, the marginal revenue product curve slopes downward after some point because as more of a factor is employed, which of the following declines?

If a monopolist can increase output and profit by engaging in perfect price discrimination, allocative efficiency will

If the production of a good results in a positive externality, the government might be able to improve economic efficiency in this market by

The following questions refer to the diagram below, which shows a market’s cost and revenue curves. A graph in the first quadrant is shown with price of good X on the vertical axis and quantity of good X on the horizontal axis. Values P 1, P 2, P 3, and P 4 are labeled from bottom to top on the vertical axis, and values Q 1, Q 2, and Q 3 are labeled from left to right on the horizontal axis. A straight, increasing line labeled marginal social cost is drawn that passes through points Q 1 and P 2, Q 2 and P 3, and Q 3 and P 4. A second parallel line labeled marginal private cost is drawn below the first line and passes through points Q 2 and P1, and Q 3 and P 2. A curve labeled marginal social benefit is also drawn starting in the upper left corner of the graph that is decreasing and concave up, and passes through points Q 1 and P 4, Q 2 and P 3 where it intersects the marginal social cost curve, and Q 3 and P 2 where it intersects the marginal private cost curve. Dashed horizontal and vertical reference lines are drawn from each labeled value on the axes. Points on the curves are marked at the coordinates Q 1 and P 2, Q 1 and P 4, Q 2 and P 1, Q 2 and P 3, Q 3 and P 2, and Q 3 and P 4. The socially optimal quantity and the per-unit tax that will achieve the socially optimal quantity are which of the following?

Table: Short-run Output for a Perfectly Competitive Firm Number of Workers Total Product 1 15 2 20 3 24 4 27 5 29 The table above shows the short-run output for a perfectly competitive firm. If the price of the product is $10, what is the marginal revenue product of the third worker hired?

Which of the following situations best fits with the description of a firm in a perfectly competitive market?

If a per-unit tax is imposed on a monopolist, how will the monopolist’s marginal cost curve, output, and the price paid by consumers be affected?