Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain
What will be an ideal response?
Yes. As long as the marginal cost is below the average total cost, average total cost will be decreasing.
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Competitive pressure in the insurance market will, in general,
A. make insurance premiums attractive to low risk drivers. B. induce risky drivers to self-insure. C. induce the least risky drivers to self-insure. D. make insurance premiums unattractive to drivers who are much riskier than average.
An example of nondiscretionary fiscal policy would be
A. an interest rate cut implemented to stimulate consumption. B. a federal jobs program adopted to stimulate consumption. C. a tax cut adopted to stimulate consumption. D. the existence of the progressive federal income tax.
Which of the following would be a private cost to a cigarette smoker?
A. Cost to the employer of the higher health insurance premiums due to the hiring of a smoker. B. Cost to the employer of the extra effort lost due to the increased missed days of work as a result of smoking. C. Cost to the city of extra park cleanup due to the presence of cigarette butts. D. Price of the pack of cigarettes.
The rational outcome of a low-price guarantee policy is that:
A. both firms will sell at the low price. B. one firm will sell at a low price and the competitor will sell at a high price. C. both firms will sell at the high price. D. consumers will be better off.