In a graph showing the short-run cost curves, the one curve which declines continuously as we expand output is called
A) the average fixed cost curve.
B) the average variable cost curve.
C) the average total cost curve.
D) the marginal cost curve.
Answer: A
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In the above figure, what is the equilibrium level of real GDP with government and the foreign sector?
A) $4.0 trillion B) $2.5 trillion C) $3.0 trillion D) $2.0 trillion
When demand is unit elastic, a change in price causes total revenue to stay the same because
A) the change in profit is offset by the change in production cost. B) buyers are buying the same quantity. C) total revenue never changes with price changes. D) the percentage change in quantity demanded exactly offsets the percentage change in price.
Membership in the Federal Reserve System is
a. limited to national banks. b. limited to state banks. c. required of national banks and open to state banks. d. forbidden to state banks.
Suppose the price of good X falls. As a result, the quantity demanded for good X increases for a particular consumer. For this consumer, the substitution effect induced the consumer to purchase more X while the income effect induced the consumer to purchase less X. We can infer that X is a(n)
a. normal good. b. inferior good. c. Giffen good. d. luxury good.