Average total cost is
A) total explicit costs divided by the quantity of output produced.
B) total cost divided by the quantity of output produced.
C) the change in fixed plus variable cost divided by the quantity of output produced.
D) variable cost divided by the quantity of output produced.
B
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To calculate the revenue government receives when a tax is imposed on a good, multiply the
A) pre-tax equilibrium price by the pre-tax quantity. B) after-tax equilibrium price by the after-tax quantity. C) tax by the pre-tax quantity. D) tax by the after-tax quantity. E) after-tax equilibrium price by the after-tax quantity and then subtract the pre-tax equilibrium price multiplied by the pre-tax quantity.
Refer to Figure 12-4. If the market price is $30, should the firm represented in the diagram continue to stay in business?
A) No, it should shut down because it cannot cover its variable cost. B) Yes, because it is making a profit. C) No, it should shut down because it is making a loss. D) Yes, because it is covering part of its fixed cost.
If a manager's expected marginal cost exceeds their expected marginal revenue, which of the following is true?
A) The manager is maximizing expected profit. B) To maximize expected profit, the manager should increase production. C) The expected profit from producing another unit is negative. D) The expected profit from producing another unit is positive.
Which of the following may result in a higher equilibrium price for a product?
a. Advertising b. Expectations c. Imperfect information d. All of the above answers are true. e. None of the above answers a.-c. are true.