Explain why the average total cost curve and the average variable cost curve get closer to each other as output expands
What will be an ideal response?
The reason the two curves get closer to each other as output expands has to do with the fact that average fixed costs fall with increases in output. Since the only thing separating average total costs from average variable costs is the average fixed cost it stands to reason that they two curves should become closer with output expansion.
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Since the 1980s, the Congressional budget has allocated substantial funds to antitrust investigation and enforcement, which is why the Antitrust Division of the Department of Justice is one of the most vigorous agencies of government today
Indicate whether the statement is true or false
If the Marginal utility of the first bar of chocolate that Dan eats is 5 utils, then which of the following is most likely to be true?
a) Dan will eat 5 bars of chocolate. b) The marginal utility of the second bar of chocolate that Dan eats will be less than 5 utils. c) The marginal utility of the second bar of chocolate that Dan eats will be greater than 5 utils. d) None of the above.
Propose that you work for Taco Bell and you advertise during American Idol. Their rating is 19. This is equal to 21.3 million TV's. American Idol charges $700,000 for a 30-second ad. If a meal contribution at Taco Bell is $0.60, how many purchases are required to break even for the ad costs?
a. 1,454,598 b. 700,000 c. 420,000 d. 1,116,667
If a firm adopts a production process that is costly in order to reduce pollution, the result is
A. A decrease in the firm's ATC curve and an increase in the firm's profits. B. An increase in the firm's ATC curve and an increase in the firm's profits. C. A decrease in the firm's MC curve and a decrease in the firm's profits. D. A decrease in the profit-maximizing rate of output and a decrease in the firm's profits.