Which type of cost does depend on a firm's output?
A. total cost
B. variable cost
C. marginal cost
D. all of the above
Answer: D
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Critics of advertising argue that advertising by its very nature imposes a cost on society. Explain what these costs are
What will be an ideal response?
Which of the following is a normative question about an initiative to impose a new tax?
A.All of the above are normative considerations. B. What is the expected impact on producers and consumers? C. How much revenue is the tax expected to raise? D. Is the tax considered to be in the public interest?
The nominal price of a desk increased from $20 in 2005 to $65 in 2016. The Consumer Price Index (CPI) was 125 in 2005 and 250 in 2016. We can say that
A) the real price of a desk increased over time. B) the real price of a desk fell over time. C) the real price of a desk has not changed over time. D) There is not enough information to determine the real price of a desk.
Suppose the price of an item in a perfectly competitive market is $2. For a firm in this market, MC = MR at an output of 100 units. The average total cost at this output level is $4 per unit, and TVC is $80. We may conclude that
A) the firm should shut down because TC > TR. B) the firm should continue to produce because P>AVC. C) the firm should shut down because its TFC is $320 and its TC is $400. D) the firm should shut down because other firms will enter the industry as the market is perfectly competitive.