The marginal cost is the slope of the:
a. marginal product curve.
b. total cost curve.
c. total product curve.
d. long-run average total cost curve.
Answer: b. total cost curve.
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Improving the education level of the labor force will
A. shift the production possibilities curve inward. B. not shift the production possibilities curve since the total size of the labor force has not been changed. C. shift the production possibilities curve outward. D. cause a movement from a point inside the production possibilities curve to a point on the curve.
The aggregate supply curve illustrates that the
A) higher the price level, the greater the quantity of real GDP supplied. B) higher the price level, the smaller the quantity of real GDP supplied. C) aggregate demand curve is not needed to determine the aggregate price level. D) price level does not affect the quantity of real GDP supplied. E) amount of potential GDP increases when the price level rises.
Balin's Burger Barn operates in a perfectly competitive market. Balin's is currently earning economic profits of $20,000 per year. Based on this information, we can conclude that
A) Balin's is operating in the short run, but not the long run. B) Balin's is operating in the long run. C) Balin's profits will discourage new firms from entering. D) Balin's will increase its market price over the counting months.
If the marginal cost curve for paper production were altered to reflect the cost of the odor imposed on surrounding areas, which of the following would occur?
A. The market price, accounting for the externality, would rise. B. The market price, accounting for the externality, would fall. C. The marginal cost curve would shift downward. D. It would become socially efficient to produce more paper.