A firm has positive fixed cost and positive variable cost. At its current level of output, marginal cost equals average cost. The firm must
A. not be producing at its profit-maximizing level of output.
B. be producing the quantity that minimizes average cost.
C. be operating at a point at which total variable cost equals total fixed cost.
D. be earning negative profit.
Answer: B
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The individual pictured in Figure 5.2
A) must be risk-averse. B) must be risk-neutral. C) must be risk-loving. D) could be risk-averse, risk-neutral, or risk-loving. E) could be risk-averse or risk-loving, but not risk-neutral.
In the calculation of the CPI, books are given greater weight than magazines if
a. consumers buy more books than magazines. b. the price of books is higher than the price of magazines. c. it costs more to produce books than it costs to produce magazines. d. books are more readily available than magazines to the typical consumer.
Refer to the graph shown. The shift from SATC3 to SATC4 reflects:
A. diminishing marginal productivity. B. economies of scale. C. diseconomies of scale. D. increasing marginal productivity.
Cost curves in the long run differ from cost curves in the short run
a. True b. False Indicate whether the statement is true or false