Which of the following statements is correct?
A. Average total cost is the difference between average variable cost and average fixed cost.
B. Marginal cost measures the cost per unit of output associated with any level of production.
C. When marginal product rises, marginal cost must also rise.
D. Marginal cost is the price or cost of an extra variable input (for example, an additional
worker or machine) divided by its marginal product.
Answer: D
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The soil of the Middle Colonies is generally:
a. rocky and sandy. b. fertile and difficult to till. c. fertile and easy to till. d. alkaline and poorly drained.
Britain's decision to exit the ERM in September 1992 had what effect?
A) Lower interest rates and a depreciated exchange rate caused the British economy to expand. B) It subjected Britain to a ruling by the European Courts of Justice. C) It caused the system to collapse. D) It had no effect on Britain's economy.
Efficiency wage theories claim that firms may pay high real wages in order to:
A. avoid the threat of unionization. B. make workers more productive. C. discourage unskilled workers from applying. D. reduce the level of frictional unemployment.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.