Refer to the above graph of a representative firm in monopolistic competition. What does line 2 represent?
A. Average total cost
B. Marginal revenue
C. Marginal cost
D. Demand
Answer: A
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The principle of diminishing returns to capital states that if the amount of labor and other inputs employed is held constant, then the greater the amount of capital in use the:
A. the less an additional unit of capital adds to production. B. less is produced. C. less production is wasted. D. the more an additional unit of capital adds to production.
The planned investment function will shift downward if
A) real disposable income increases. B) the interest rate falls. C) business expectations become more pessimistic. D) the existing stock of capital decreases.
The failure of communism in a large number of countries is at least partly explained by
a. the fact that those countries relied absolutely on the invisible hand. b. the fact that those countries did little or nothing to restrict trade with other countries. c. the lack of information, on the part of central planners in those countries, about tastes and preferences in their economies. d. the lack of information, on the part of central planners in those countries, about how much authority the government had in affecting economic outcomes.
Demand deposits are a type of
a. checking account. b. time deposit. c. money market mutual fund. d. savings deposit.