Refer to Figure 8.1, which shows a family of average cost curves. The average fixed cost at a given level of output is represented by:
A. the vertical distance between Curve 1 and Curve 2 at a given level of output.
B. the vertical distance between Curve 1 and Curve 3 at a given level of output.
C. the vertical sum of Curve 1 and Curve 2 at a given level of output.
D. the vertical sum of Curve 1 and Curve 3 at a given level of output.
Answer: A
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If expectations are formed adaptively, then people
A) use more information than just past data on a single variable to form their expectations of that variable. B) often change their expectations quickly when faced with new information. C) use only the information from past data on a single variable to form their expectations of that variable. D) never change their expectations once they have been made.
Income is considered to be a
A) nontaxable stream of funds. B) flow. C) stock. D) resource.
In the base year, the GDP deflator is always
a. -1. b. 0. c. 1. d. 100.
Which of the following statements is true?
A. The inclusion of intermediate goods and services into GDP calculations would underestimate our nation's production level. B. Nominal GDP + Inflation - Unemployment = Real GDP. C. Real GDP has been adjusted for changes in the general level of prices due to inflation. D. Real GDP equals nominal GDP multiplied by the GDP deflator.