Your boss explains to you that the total fixed costs of the company are $1 million. He also informs you that each unit of production will cost twenty five cents more with each 100-unit increase
He has asked you to draw the fixed costs of the company with costs on the vertical axis and quantity of goods sold on the horizontal axis. Without drawing a graph tell your boss what the graph will look like using words. What information did your boss give you that you didn't need in order to draw the graph?
The fixed cost graph will be a horizontal line. The costs do not change with changes in output. The information that he gave me concerning how much additional units of production would cost is irrelevant since those are variable expenses and the boss was asking me to draw the fixed cost graph as a function of output.
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Of the following, the most rapid rise in health care costs in the United States can be attributed to
A) the cost of malpractice lawsuit settlements. B) the cost of malpractice insurance. C) the cost to treat uninsured patients. D) slow growth in labor productivity in health care.
At a given output level, a temporary reduction in government purchases will
A) increase desired saving, causing the IS curve to shift down and to the left. B) increase desired saving, causing the IS curve to shift up and to the right. C) decrease desired saving, causing the IS curve to shift down and to the left. D) decrease desired saving, causing the IS curve to shift up and to the right.
Which of the following statements would make a reasonable hypothesis to test?
A) Deflation is worse than inflation in any economy. B) An unemployment rate below 4% is bad for the economy. C) As tax rates increase, eventually tax revenues will decline. D) Higher real GDP per capita figures lead to happier citizens.
An opportunity cost is:
a. the value obtained when making a choice. b. the price paid for the choice that is made. c. what must be given up to obtain something that is desired. d. what must be given up to obtain something that is not desired.