What is the shape of the AFC curve and why does it have this shape?
What will be an ideal response?
Average fixed cost (AFC) equals total fixed cost divided by total product. As the quantity produced increases, the fixed costs are spread over a larger and larger quantity of output so average fixed cost decreases. So the AFC curve slopes downward as the quantity produced increases.
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Jeep Cherokees are a normal good. If people's incomes increase, the direct result will be
A) an increase in the supply of the vehicles. B) a decrease in the demand for the vehicles. C) an increase in the demand for the vehicles. D) Both answers A and C are correct.
Which of the following will be an efficient payment scheme for a defendant's attorney, who is experienced in handling similar cases in the past?
a. Contingency fees b. Capitation fees c. Hourly billing d. Quality based billing
Which of the following is one of the most important causes for the recent increase in income inequality in China?
a. The introduction of free markets while imposing restrictions on internal migration b. The introduction of regulations that do not allow families to have more than one child c. Globalization d. The increase in pollution as a result of industrialization e. Tougher government controls on the banking system
The primary problem with estimating elasticity of demand is that:
A. real-world changes in quantity demanded are the result of changes in price only. B. data on the quantities firms sell are unavailable. C. real-world changes in quantity demanded are the result of changes in many variables other than price alone. D. data on the prices firms charge are unavailable.