The relationship between average and marginal variables can be stated as follows: if the marginal is greater than the average,
a. the average is increasing
b. the average is decreasing
c. the marginal is increasing
d. the marginal is decreasing
e. the total is decreasing
A
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During the colonial period, the largest cities were typically
a. port towns. b. located in the hinterland. c. in the South. d. landlocked.
Commitment strategies:
A. are not necessary to reach a mutually beneficial equilibrium in repeated games. B. are always needed to reach a mutually beneficial equilibrium in single-round games. C. usually fail to work. D. are not observed in reality.
The opportunity costs associated with the use of resources owned by a firm are:
A. externalities. B. implicit costs. C. explicit costs. D. sunk costs.
The Razor-Thin Disposable Razor Company is a perfectly competitive firm producing where MR = MC. The current market price of a disposable razor is $3.00. The firm sells 1,800 disposable razors. Its AVC is $2.00 and its AFC is $1.50. What should Razor-Thin do?
A. Decrease production so that AVC will decrease. B. Continue to produce because price exceeds AVC. C. Shut down and produce zero razors because price is less than ATC. D. Increase production so that AFC will decrease.