Explain the relationship between ?TC/?q and ?VC/?q.
What will be an ideal response?
These equations both calculate marginal costs. They yield the same results because change in total cost (?TC) and change in variable cost (?VC) will be the same amount. This is true because TC = VC + FC (fixed cost), and FC does not vary with production output (q).
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A) there are no unemployed workers. B) all unemployment is frictional or structural. C) there are fewer unemployed workers than available jobs. D) all unemployment is cyclical.
Compare the effect on the price level and real GDP of a decrease in tax rates assuming a supply-side effect versus no supply-side effect
Compared to no supply-side effect, including a supply-side effect for the decrease in tax rates will cause the price level to increase ________ and real GDP to increase ________. A) more; less B) less; less C) more; more D) less; more
The most important characteristic of the equilibrium price is that it:
A. guarantees that producers earn profit. B. clears the market. C. increases the quantity demanded. D. decreases the quantity demanded.
Measured in terms of farm employment and the number of farms, agriculture has been:
A. a declining industry. B. an expanding industry. C. a stable industry. D. a volatile industry.