How would each of the following affect the firm's marginal, average, and average variable cost curves?
a. An increase in wages
b. A decrease in material costs
c. The government imposes a fixed amount of tax.
d. The rent that the firm pays on the building that it leases decreases.
a. Wages are a variable cost, so MC, AVC, and ATC increase.
b. Materials are a variable cost, so MC, AVC, and ATC decrease.
c. A fixed or lump-sum tax increases ATC but not MC or AVC.
d. Rent is generally viewed as a fixed cost, so ATC decreases, but MC and AVC are unchanged.
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If two countries adhere to a gold standard, the exchange rate for their currencies is fixed
Indicate whether the statement is true or false
You are more likely to hire your teenage child to cut your lawn than a landscaping firm
a. since the teenager is paid each time when she finishes and the landscaping firm bills your credit card each month b. if the teenager has a lower opportunity cost of cutting the lawn than the landscaping firm does c. because the teenager is less likely to have the specialized tools necessary to complete the job quickly d. due to the bounded rationality of the diversified landscaping firm e. when it does not take a substantial amount of time and effort to find a reputable landscaping firm to do the job
Which of the following will lead to GDP underestimating our true output? a. Mary begins a catering business
b. James begins drawing Social Security benefits upon his retirement. c. David accepts a position as a software specialist at Microsoft. d. Gretchen begins an accounting and bookkeeping service in her home, accepting cash as payment, which is not reported to tax authorities.
Inflation only results in reduced unemployment when the expected inflation rate and actual inflation rate are the same.
Answer the following statement(s) true (T) or false (F)