A baker can produce two products: cupcakes and pies. The table below is the baker's production possibilities schedule:Production Possibilities ScheduleProductABCDEFCupcakes01220365681Pies1086420If the baker uses all of its resources to produce only pies, then the total number of pies will be
A. 20.
B. 10.
C. 81.
D. 2.
Answer: B
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Average fixed cost is
A) AC minus AVC. B) TC divided by Q. C) AVC minus MC. D) TC minus TVC.
In labor markets, the substitution effect occurs when
A) a substitute good also functions as a complement. B) the cost of production falls enough that the firm will produce a larger amount of output. C) a change in the price of a substitute input causes the demand for labor to change in the same direction. D) a change in the price of a substitute input reduces the cost of capital.
Prolonged periods of monetary contraction, as was the case during the Great Depression, will likely result in
a. an increase in real output and employment. b. an increase in loanable funds and upward pressure on the rate of inflation. c. a decrease in output and downward pressure on prices. d. a decrease in unemployment and upward pressure on prices.
Saving to meet long-term objectives-such as retirement, college attendance, or to purchase a home,-is called ________ saving.
A. public B. precautionary C. life-cycle D. bequest