What is the most important determinant of the firm's short-run cost curves?
What will be an ideal response?
The short-run cost curves owe their shapes to the law of diminishing marginal product. Given a constant price of a variable input, marginal costs will rise as marginal product diminishes. Similarly, given the relationship that exists between marginal cost and average total and average variable costs, we can also say the law of diminishing marginal product determines their shapes.
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If a middle-eastern war reduced the quantity of crude petroleum available for export to Japan and the United States by 40%, and the U.S. government responded by imposing price ceilings on petroleum,
A) more petroleum would be available for Japanese users. B) the demand for crude petroleum in the U.S. would increase. C) the demand for natural gas in the U.S. would decline. D) the price of petroleum would rise even higher in Japan. E) all of the above would be likely to result.
Why is it that only a small percentage of American firms are incorporated?
a. Corporate debt as stockholder's liability. b. Small size of firms. c. Unlimited liability. d. Inability to outlast associated individuals.
In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called
If the consumer price index increased from 1.52 to 1.65, then it must be the case that ________ relative to prices in the base year.
A. some prices rose and some prices fell B. all prices rose C. the weighted average level of prices rose D. all prices fell