The average total cost curve
A) is U-shaped.
B) diminishes initially because average fixed costs diminish.
C) increases eventually because of diminishing returns.
D) All of the above answers are correct.
D
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Using cross-sectional data from the two Housing Assistance Supply Experiment (HASE) sites—Brown County, Wisconsin, and St
Joseph County, Indiana—John Mulford of Rand Research estimates the long-run "permanent" income elasticity of housing expenditures to be 0.45 for owners. Using this information, what is likely to happen to housing expenditures if the government increases income transfers to recipients in HASE sites? A) Housing expenditures will decrease by a small amount. B) Housing expenditures will increase significantly. C) Housing expenditures in HASE sites will fall significantly as recipients move out of these areas to higher-income areas. D) Housing expenditures will increase, but not significantly.
If firms believe that business is expanding, then at any given wage they will desire to hire a _________ quantity of labor, and the labor demand curve shifts to the _____.
a. greater; left b. greater; right c. lower; left d. lower; right
Maria wishes to buy gasoline and have her car washed. She finds that if she buys 9 gallons of gasoline at $2.50 per gallon, the car wash costs $2, but if she buys 10 gallons of gasoline, the car wash is free. For Maria, the marginal cost of the tenth gallon of gasoline is
A) $2.50. B) zero. C) $2.00. D) 50 cents.
Refer to the following graphs.
Americans nationwide have been complying with recycling regulations with unexpected zeal. The effect on the market for recycled paper is best shown by which graph?
A. I B. II C. III D. IV