In comparing long-run and short-run costs, which of the following statements is true at each level of output?
a. long-run total cost is always less than short-run total costs
b. long-run total cost cannot exceed short-run total cost
c. long-run and short-run total costs are equal when fixed costs are large
d. firms usually make decisions about production levels based on long-run costs rather than short-run costs
e. short-run total cost cannot exceed long-run total cost
B
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When the Federal Reserve increases the money supply, people spend more because they now have more money
Indicate whether the statement is true or false
The main goal of macroeconomic research is to
A) predict how the macroeconomy will perform in the future. B) analyze current macroeconomic data. C) develop new data that can be used to understand better the operation of the economy. D) make general statements about how the economy works.
The Friedman Rule is optimal because
A) households would be able to buy more as prices decrease. B) the central bank has better control of the money supply. C) money is neutral. D) households are indifferent between holding bonds and money.
Which of the following statements is correct?
a. Theory and hypothesis are interchangeable terms for the same thing.
b. A hypothesis may result from a tested and confirmed theory.
c. A theory may result from a tested and confirmed hypothesis.
d. A hypothesis is a theory whose formulation relies on mathematics.