Explain why the marginal cost curve intersects average total cost at the point of minimum average total cost.
What will be an ideal response?
Suppose that marginal cost is below average total cost. This will have the effect of dragging down the average (think about what happens to your 3.5 grade point average if you get a D in economics!). Now suppose that the marginal cost is above the average total cost. This will lead to the average total cost increasing. So average total cost is at a minimum when the marginal cost exactly equals the average total cost.
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Which of the following could be an institutional barrier to employment?
a. licensing requirements b. labor unions c. minimum wages d. all of the above
Cashing out capital gains in Virtual Currency System #3 (i.e., turning virtual capital gains into real world currencies) causes the nation's:
a. M2 money multiplier to remain the same. b. M2 money supply to fall. c. M2 money multiplier to fall. d. Monetary base to rise.
Guns and butter are used to represent the classic societal tradeoff between spending on
a. durable and nondurable goods. b. imports and exports. c. national defense and consumer goods. d. law enforcement and agriculture.
If supply and demand both decrease, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. lower; uncertain B. higher; higher C. uncertain; lower D. lower; lower