When production increases, the average variable cost and average total cost curves:
A. cross.
B. move closer together.
C. become horizontal.
D. spread farther apart.
Answer: B
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If a nation's nominal GDP is $40 billion, its money supply is $8 billion, and its price level is 1.25, then the velocity of money is
A) 2.0. B) 0.2. C) 6.25. D) 5.0.
Suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed become employed. The labor force participation rate will
A) decrease. B) remain constant. C) increase. D) not change in a way that can be predicted.
If the supply of coffee falls due to bad weather conditions in coffee-exporting countries, then the
a. price and quantity will rise b. price and quantity will fall c. price will fall and quantity will rise d. price will rise and quantity will fall e. quantity will fall, but price may rise or fall
Which of the following statements about quotas is correct?
a. They benefit domestic consumers through lower prices. b. They benefit domestic producers through higher prices. c. They raise world output. d. They cause outward shifts in the domestic and foreign production possibilities frontiers. e. They benefit domestic producers through increased competition that stimulates innovation.