Average fixed cost:
a. declines continuously as output increases
b. is always greater than average variable cost.
c. equals the difference between average total cost and average variable cost.
d. is characterized by both (a) and (c).
d
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What happens to the demand for loanable funds curve when the economy enters a recession?
A) The demand for loanable funds curve shifts leftward because wealth decreases. B) The demand for loanable funds curve shifts leftward because expected profit falls. C) The demand for loanable funds curve shifts leftward because the real interest rate falls. D) The demand for loanable funds curve shifts rightward because the real interest rate falls. E) The demand for loanable funds curve shifts rightward because expected profit falls.
Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service
Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price? A) If Jason raises his price he would lose all his customers. B) He would lose some but not all his customers. C) Initially, his customers might complain but over time they will come to accept the new rate. D) If Jason raises his price, then all others supplying the same service will also raise their prices.
The real rate of return on holding cash is equal to:
A. the real interest rate. B. zero minus the inflation rate. C. the expected inflation rate. D. the nominal interest rate.
When we say that an individual behaves according to "rational self-interest," we mean that this individual
A. is motivated by greed. B. will always buy the most fashionable items available. C. is making choices that he or she believes will leave him or her better off. D. never considers the well being of any other individual.