Given the production function and total cost function shown in Chapter 4, as production increases, average variable costs
A. decrease for a while and then increase.
B. decrease constantly.
C. increase constantly.
D. increase for a while and then decrease.
Answer: A
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In 1975, Richard Petty won the NASCAR race in Richmond, earning $6265. In 2006, Dale Earnhardt, Jr., won the race, earning $239,166. The CPI index was 52.5 in 1975 and 198.7 in 2006 (base year = 1982-1984 )
Calculate the real earnings (based on base year 1982-1984 ) of both Petty and Earnhardt.
Adverse selection in insurance requires that
a. all people face the same risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are risk averse d. insurers can tell higher risk people from lower risk people
A local government can spend $800 today on a project that will yield $968 of benefits two years from today.
(i) If the interest rate is 4%, what is the present value of the project? (ii) For what interest rates would it be beneficial for the government to pursue the project?
For a cost function C = 100 + 10Q + Q2, the marginal cost of producing 10 units of output is:
A. 200. B. 10. C. 210. D. None of the answers are correct.