You observe that at your current production of lunch boxes, the average total cost of producing lunch boxes is $5 and the marginal cost of producing lunch boxes is $2. What should always happen if you increase lunch box production?
A. Marginal cost will rise.
B. Marginal cost will fall.
C. Average total cost will rise.
D. Average total cost will fall.
Answer: D
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The PPF between goods X and Y will be a downward-sloping
A) straight line if increasing opportunity costs exist. B) straight line if decreasing opportunity costs exist. C) curve that is bowed inward if increasing opportunity costs exist. D) straight line if constant opportunity costs exist.
During a recession the economy experiences
a. rising employment and income. b. rising employment and falling income. c. rising income and falling employment. d. falling employment and income.
If the industry in the above figure was perfectly competitive, the level of output would
A) be less than the single-price monopoly level of output.
B) be the same as the single-price monopoly level of output.
C) exceed the single-price monopoly level of output by 20 units per day.
D) exceed the single-price monopoly level of output by 60 units per day.
Employers verify the facts of potential employees' resumes to avoid
A) signaling. B) screening. C) cheap talk. D) moral hazard.