Marginal cost is equal to
A) change in total cost divided by change in output.
B) change in total variable cost divided by change in output.
C) total variable cost divided by quantity of output.
D) Both A and B are correct.
Answer: D
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If banks faced a 100 percent reserve requirement, a $10,000 reduction in banking reserves would decrease the money supply by: a. $1,000,000. b. $100,000
c. $10,000. d. $1,000.
If equal amounts of a variable input are sequentially added to the fixed input in a typical production function,
A. the additions to output will be constant. B. increments to output will increase indefinitely. C. the increments to output will decrease first and then increase. D. increments to output will first increase at an increasing rate and then at a decreasing rate.
Which of the following best explains why public agencies are less likely to control costs than are private businesses?
A. Rent-seeking behavior B. Corruption C. The inefficiency of taxation D. The incentive problem
Explain: “The land value tax is the economist’s ideal; it is neutral in its economic effects.”
What will be an ideal response?