Answer the following statement true (T) or false (F)
1) Average fixed costs diminish continuously as output increases.
2) Economic profit is found by subtracting accounting costs from total revenue.
3) A firm's economic profit is usually higher than its accounting profit.
4) The law of diminishing returns explains why short-run marginal cost curves are upsloping.
5) The law of diminishing returns explains diseconomies of scale.
1) T
2) F
3) F
4) T
5) F
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The percentage change in the quantity demanded of a good due to a percentage change in its price is referred to as the:
A) price multiplier. B) price elasticity of demand. C) shadow price of the good. D) consumer surplus.
Which of the following policy measures required the SEC to prevent issuers of asset-backed securities from choosing the credit-rating agencies that will give them the highest rating and supported earlier initiatives by the SEC?
A) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 B) Sarbanes-Oxley Act of 2002 C) Global Legal Settlement of 2002 D) Gramm-Leach-Bliley Act of 1999 E) Riegle-Neal Act of 1994
In our modern economy, the adjustment process necessary to eliminate a recessionary gap is very rapid.
Answer the following statement true (T) or false (F)
In Figure 24.1 total cost is represented by the area
A. CDFE. B. ABFE. C. ABGHE. D. ABDC.