Figure 10-18
As shown in , and assuming the aggregate demand curve shifts from AD1 to AD2, the full-employment level of real GDP is
a.
$10 billion.
b.
$4 billion.
c.
$100 billion.
d.
unable to be determined.
a
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Average variable cost (AVC)
A) is the variable cost divided by the average sales price of the final good. B) is the variable cost divided by the quantity of output produced. C) is equal to average fixed cost (AFC) when no output is produced. D) is always less than average fixed cost (AFC).
If regulators required firms in monopolistically competitive markets to set price equal to marginal cost,
a. firms would most likely experience economic losses. b. firms would also operate at their efficient scale. c. new firms would likely to enter the market. d. the most efficient firms would not likely to be affected.
When a firm is experiencing diminishing marginal returns:
A. average cost is increasing. B. average cost is decreasing. C. marginal costs are increasing. D. marginal costs are decreasing.
If the additional revenue from hiring an additional worker equals the additional costs from hiring the extra worker, then we know that
A. MFC = MRPL. B. MRPL/P = MFC. C. MFC = MPPL. D. MFC/MPPL = wage.