In its monthly production analysis, a door manufacturer determines that the marginal cost of producing an additional door is higher than the firm’s average total cost. This means that if no other variables change this month, and the firm produces more doors, ______.
a. average variable cost will rise, and average total cost will fall
b. average variable cost and average total cost will both rise
c. average fixed cost and average total cost will both rise
d. average variable cost will fall, and average fixed cost will rise
b. average variable cost and average total cost will both rise
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A recessionary gap occurs when
A) aggregate demand falls, but other things remain constant. B) the short-run equilibrium level of real GDP is less than the level consistent with the long-run aggregate supply curve. C) the short-run equilibrium level of real GDP is greater than the level consistent with the long-run aggregate supply curve. D) short-run aggregate supply falls, but other things remain constant.
During a deflationary period,
A) the price level rises. B) the nominal interest rate does not change. C) the nominal interest rate is less than the real interest rate. D) the real interest rate is less than the nominal interest rate.
If long run average costs rise with output, you have
a. Increasing returns to scale b. Decreasing returns to scale c. Constant returns to scale d. None of the above
Rent controls tend to _____ the housing supply and to _____ the rents that people in non-rent-controlled apartments pay.
Fill in the blank(s) with the appropriate word(s).