Refer to the scenario above. The average total cost of Firm A when it produces 100 pens is $3, and the average total cost of Firm B when it produces 50 pens is $7. At these levels of production, which of the following statements is true?
A) Both firms incur losses.
B) Firm A incurs a loss but Firm B makes a profit.
C) Firm B incurs a loss but Firm A makes a profit.
D) Both firms make profits.
C
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A market is a natural monopoly when:
A. a good is produced most economically by several firms. B. a good is produced most economically by one firm. C. the government grants a firm a patent on a good. D. the firm's average cost function is everywhere upward sloping.
A consumption-based theory of the determination of the real interest rate is based on the assumption that: a. a rise in the real interest rate will increase current consumption
b. the real interest rate must adjust to make people willing to experience changing consumption levels over time. c. the real interest rate is determined by the supply and demand for investment and is therefore unaffected by consumption decisions. d. the real interest rate must be positive.
An increase in aggregate demand due to higher foreign income will cause:
a. domestic equilibrium GDP to increase. b. domestic equilibrium GDP to decrease. c. domestic prices to fall. d. foreign prices to fall. e. foreign equilibrium GDP to fall.
Banks can be counted on to create the proper money flows to foster economic activity with minimal inflation and unemployment
Indicate whether the statement is true or false