Which of the following statements is false?
A) The difference between average total cost and average fixed cost is average variable cost.
B) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points.
C) Firms often refer to the process of lowering average fixed cost as "spreading the overhead."
D) When marginal cost equals average total cost, average total cost is at its highest value.
D
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Suppose that the sub sandwich business is a competitive, constant-cost industry. An increase in demand for sub sandwiches, will, in the long-run lead to
a. an increase in price and industry output, but no increase in the output of existing firms. b. no increase in price, no increase in the output of existing firms but an increase in industry output because of new firms. c. no increase in price and an increase in industry output as each existing firm produces more. d. no changes in price, output of existing firms or the number of firms in the industry.
The local diner is usually jammed on Saturday mornings. Luke knows the owner and had him reserve a stool at the counter. Luke has
A) cooperated with the owner. B) competed with other customers. C) taken an efficient course of action, from his own perspective. D) engaged in all of the above.
One way for firms to analyze their choices in an oligopoly is by using:
A. game theory. B. cost minimization theory. C. marginal revenue maximization strategy. D. None of these is an effective method for oligopolists.
For Keynes, the most important determinant of employment and output is/are
A. interest rates. B. aggregate supply. C. aggregate demand. D. the level of inventories.