Refer to Variable Cost of Production. If the firm actually has $20 in fixed costs, the average cost of the second unit of output is
The following questions refer to the following table which shows a firm's variable costs of production.
a. $20 per unit.
b. $25 per unit.
c. $30 per unit.
d. $35 per unit.
d. $35 per unit.
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The supply-side effects of an income tax cut ________ potential GDP and ________ aggregate supply
A) increases; do not change B) increase; increase C) decrease; increase D) decrease; decrease E) increase; decrease
If the federal government tries to make fiscal policy sustainable by increasing taxes on capital income, the after-tax return to capital goods will ________ and will result in ________ potential GDP
A) increase; lower B) decrease; higher C) decrease; lower D) increase; higher
A firm that is earning zero economic profit should go out of business.
Answer the following statement true (T) or false (F)
If autonomous consumption decreases, which of the following combinations of events would be most likely to occur?
a. An upward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a leftward shift of the aggregate demand curve b. A downward shift of the aggregate expenditure line, a leftward shift of the money demand curve, and a leftward shift of the aggregate demand curve c. A downward shift of the aggregate expenditure line, a leftward shift of the money demand curve, and a rightward shift of the aggregate demand curve d. A downward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve e. An upward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve.