If marginal cost exceeds average total cost:
A. average variable cost increases as output increases.
B. average variable cost decreases as output increases.
C. average total cost decreases as output increases.
D. average fixed cost increases as output increases.
Answer: A
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Which of the following is an important difference between police protection and food and explains why one is commonly provided by government while the other is not?
A) Food can easily be withheld from people who don't pay for it. B) Food is not a traditional concern of government. C) Food is too vital to be entrusted to government. D) Food producers form a powerful political lobby. E) Food provided through government would be inefficient.
The Internet has created a new category in the book selling market, namely, the "barely used" book. How does the availability of barely used books affect the market for new books?
A) The demand curve for new books shifts to the right. B) The supply curve for new books shifts to the left. C) The demand curve for new books shifts to the left. D) The supply curve for new books shifts to the right.
Industries in which firms ________ are likely to contract in the long-run.
A. have no competition B. break even C. suffer losses D. have positive profits
Producer surplus is the difference between the most a person is willing to pay and market price.
Answer the following statement true (T) or false (F)