The average total cost incurred by a firm is calculated by dividing:
a. the change in total cost by the change in the quantity of output.
b. total output by the number of people employed.
c. the change in total output by the change in the number of people employed.
d. total cost by total output.
e. total output by total cost.
d
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On any given day, a salesman can earn $0 with a 40% probability, $100 with a 40% probability, or $300 with a 20% probability. His expected earnings equal
A) $0. B) $100 because that is the most likely outcome. C) $100 because that is what he will earn on average. D) $200 because that is what he will earn on average.
According to the above table, a surplus exists when
A) the price is $1 per unit. B) the price is $2 per unit. C) the price is $3 per unit. D) the price is greater than $3 per unit.
An equilibrium occurs in a game when
a. price equals marginal cost. b. quantity supplied equals quantity demanded. c. all independent strategies counterbalance all dominant strategies. d. all players follow a strategy that they have no incentive to change.
If the price of apples goes down, then the demand for pears will
A) increase, assuming apples and pears are substitutes. B) decrease, assuming apples and pears are substitutes. C) decrease, assuming apples and pears are complements. D) remain constant, assuming apples and pears are related goods.