The average cost curve
A. is the vertical summation of the AFC and the AVC curves.
B. lies below the AVC curve.
C. lies below the AFC curve.
D. is the vertical summation of the MC and AVC curves.
Answer: A
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The fact of increasing opportunity costs means that a production possibilities frontier will
A) be a straight line. B) reach a maximum and then gradually decrease. C) bow outward. D) shift outward over time.
Assume Congress decides that oil companies are making too much profit and decides to increase the tax on oil companies for each gallon of gasoline produced. This would
A) guarantee a decrease in profits. B) guarantee an increase in profits. C) guarantee an increase in tax revenues. D) None of the above.
Which of the following could be a barrier to entry?
a. diseconomies of scale b. a large number of buyers and sellers c. a standardized product d. economies of scale e. diseconomies of scope
A deficit in the financial account means:
a) the nation has imported more assets than it exported b) the nation has exported more assets than it imported c) the nation has invested more than it saved d) the nation has produced more than it consumed