This month, the local widget factory produced 100 widgets. The total variable cost of production was $500 and the average total cost of production was $8
a. What is the total cost?
b. What is the total fixed cost?
c. What is the average fixed cost?
d. What is the average variable cost?
a. Total cost can be calculated as average total cost times output, which is $8 × 100 = $800.
b. Total fixed cost equals total cost minus total variable cost. The total cost from part (a) is $800. The total variable cost is $500. Therefore the total fixed cost is $800 - $500 = $300.
c. Average fixed cost equals total fixed cost divided by output, which is $300 ÷ 100 = $3.
d. Average variable cost equals total variable cost divided by output. The total variable cost from part (b) is $500, so the average variable cost is $500 ÷ 100 = $5.
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In an expansion, tax payments tend to increase and transfer payments tend to decrease
a. True b. False
Based on the graph showing the Phillips curve, you would expect to see ______ at point A than at point B.
a. higher real wages
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d. companies seeking more workers
The aggregate supply curve is drawn with
A. the price level on the vertical axis and nominal GDP on the horizontal. B. nominal GDP on the vertical axis and real GDP on the horizontal. C. the price level on the vertical axis and real GDP on the horizontal. D. real GDP on the horizontal axis and the rate of inflation on the vertical.