The long run average cost curve
A) Reflects increasing, constant and decreasing returns to labor.
B) Is an envelope of a series of short run average cost curves.
C) Is an envelope of a series of marginal cost curves.
D) None of the above
Answer: B
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External costs can be defined as
A) the cost associated with private production, but partially borne by society. B) the sum of all private production costs. C) the cost of running the federal government. D) the cost of providing all public goods and services.
Which of the following statements is most correct?
A. A sterilized foreign exchange intervention will alter the composition of a central bank's assets and alter commercial bank reserves. B. A sterilized foreign exchange intervention will leave the central bank's holdings of foreign reserves unchanged. C. A sterilized foreign exchange intervention will not alter the composition of a central bank's assets. D. An unsterilized foreign exchange intervention will alter commercial bank reserves.
Suppose there is an increase in the U.S. interest rate relative to European interest rates. How does this affect U.S. investors?
a. U.S. investors decrease their demand for euros relative to their demand for dollars, shifting D1 to D2.
b. U.S. investors shift their investments to Europe, shifting the demand curve from D1 to D2.
c. U.S. investors shift their investments to Europe, shifting the demand curve from D2 to D1.
d. U.S. investors increase their demand for euros relative to their demand for dollars, shifting D2 to D1.
The market demand curve for a particular good
A) is the horizontal sum of all individual demand curves for the good. B) may be less than an individual demand curve for the good. C) may or may not show a direct relationship between price and quantity demanded. D) will not be affected by any of the determinants of individual demand.