If fixed costs do not change, then marginal cost
A) also remains constant.
B) equals the change in variable cost divided by the change in output.
C) equals the change in average variable cost divided by the change in output.
D) equals the change in average fixed cost divided by the change in output.
Answer: B
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Assume the inverse demand function for a good can be written as: P = 30 - 2Q. Assuming P = $10, the resulting consumer surplus would be equal to:
A) $50. B) $100. C) $200. D) $225.
According to the quantity theory of money, if the long-run economic growth rate is 2.5%, by how much should the Fed increase the money supply if it wants inflation to be 2%?
A) 0.5% B) 1.25% C) 4.5% D) 5%
If the prevailing price of shirts is $10 and at this price demanders demand 100 shirts while suppliers are willing to supply 110 shirts, there is a(n)
a. shortage at the $10 price. b. surplus at the $10 price. c. equilibrium in this market. d. shortage if price were to rise above $10.
It is true that the distribution process carried out by the price system
a. accomplishes the task more efficiently than central planners would. b. favors the rich. c. is superior to other rationing mechanisms because it is able to pay attention to individual consumer preferences. d. All of the above are true.