Suppose that your firm's marginal cost of producing a pencil is 5 cents and the average cost of producing a pencil is 7 cents. If your firm is interested in minimizing average total costs, what should your firm do?
A. Increase production.
B. Decrease production.
C. Maintain production at the current level.
D. Look for ways to increase fixed costs.
Answer: A
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A payday loan company has decided to open several new locations in the city. To decide where to open these locations it hires consultants and pays them per store opened. At the end of the quarter, the company notices a many of the new stores' sales volume fail to meet expectations. This is because
a. The consultants are paid per store and not just profitable store locations b. The consultants are paid per store and hence choose the best locations c. The consultants would always choose the best locations d. None of the above
International trade forces countries to consume a combination of goods that is inside their production possibilities curve
a. True b. False Indicate whether the statement is true or false
Which of the following is most sensitive to the business cycle?
a. nondurable goods b. durable goods c. services d. transfer payments e. land
Exhibit 12-7 Negative income tax
As shown in Exhibit 12-7, a family of four pays income taxes at:
A. an income of $5,000. B. any income between zero and $40,000. C. all levels of income. D. any income above $40,000.