What is the difference between average variable costs and average total costs?
What will be an ideal response?
Average total costs equal average variable costs plus average fixed costs. Total fixed costs are constant and do not vary with output, so average fixed costs fall as output increases. For this reason, as output increases average variable and average total costs get closer together.
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An increase in the public debt will:
A. decrease the U.S. debt held by citizens and institutions in foreign nations. B. decrease the potential for higher taxation in the United States. C. increase the inequality in the distribution of income. D. increase incentives to work and bear risk.
The long run is defined as
A) any time after six months. B) any time after one year. C) the period of time when all resources are fixed. D) the period of time when most (more than 50 percent) resources are variable. E) the period of time when all resources are variable.
In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF0. What happens if the interest rate rises?
A) There is a movement to a point such as b on supply of loanable funds curve SLF0. B) The supply of loanable funds curve shifts rightward to a curve such as SLF2. C) The supply of loanable funds curve shifts leftward to a curve such as SLF1. D) none of the above
Many nations are consistently accused of enjoying the benefits of membership in the United Nations, yet they provide few or no funds to support the organization. This is an example of
A) the principle of rival consumption. B) the free-rider problem. C) the negative externality problem. D) the property rights problem.