The vertical distance between the average total cost curve and the average variable cost curve equals:
a. marginal cost
b. average fixed cost.
c. total fixed cost.
d. total variable cost.
b
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Which of the following is a reason why the growth rates of low-income countries can be higher than those of high-income countries?
a. Lower-income countries can observe the experience of those countries that have grown more quickly and can learn from it. b. Lower-income countries have a comparative advantage in the production of labor-intensive goods, which have higher terms of trade than capital-intensive goods. c. Lower-income countries have an abundant supply of rich natural resources. d. Lower-income countries can produce goods more cheaply than high-income countries as the average wage rate in low-income countries is lower than that in high-income countries.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
The government agency that computes the CPI is the _____.
Fill in the blank(s) with the appropriate word(s).
Suppose you observe a decrease in the equilibrium price and quantity of corn. Of the options listed below, this is best explained by:
A. an increase in the cost of growing corn. B. a rise in consumer income assuming corn is a normal good. C. a fall in consumer income assuming corn is a normal good. D. a decrease in the cost of growing corn.