Marginal cost:
A. increases then decreases, as output increases, to reflect marginal product.
B. is calculated as change in total output divided by change in total cost.
C. is calculated as change in total cost divided by change in total output.
D. None of these is true.
Answer: C
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On the 45-degree line diagram, for points that lie below the 45-degree line,
a. planned aggregate expenditure is greater than GDP. b. planned aggregate expenditure is less than GDP. c. planned aggregate expenditure is equal to GDP. d. planned aggregate expenditure is less than aggregate income.
Research has shown that most economic profits from selling a prescription drug are eliminated 20 years after the drug is first offered for sale. The main reason for the elimination of profits is
A) firms sell their patent rights to other firms so that they can concentrate on finding drugs to treat new illnesses. B) after 20 years patent protection is ended and other firms can produce less-expensive generic versions of the drug. C) the quantity demanded of the drug has increased enough that the demand becomes inelastic and revenue falls. D) after 20 years most people who have taken the drug have passed away or are cured of the illness the drug was intended to treat.
U.S. government purchases of gold are officially carried out by the
A) New York Federal Reserve Bank. B) Federal Open Market Committee. C) Federal Deposit Insurance Corporation. D) U.S. Treasury.
An example of a good that is rival in consumption is:
A. a radio program. B. a copy of an economics textbook. C. an economics web page. D. a lighthouse.