Fixed costs are best defined as
a. costs that do not vary with output.
b. costs that are at a minimum when output approaches the firm's capacity.
c. the amount that one more unit of output adds to total costs.
d. costs that decline as output increases.
A
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
If cross elasticity between two goods is infinite, the goods are
a. perfect substitutes b. perfect complements c. good but not perfect substitutes d. not considered to be substitutes e. produced by the same firm
The "interest-only" mortgage typically converts later to a
A. traditional mortgage with a higher payment. B. traditional mortgage with a lower payment. C. "exotic" mortgage with a lower payment. D. "negative-amortization" mortgage with a lower payment.
Refer to the total revenue graph below. If the quantity of product X demanded falls from 14,000 to 10,000 units, then it suggests that the price of X was:
A. Reduced and the demand is elastic
B. Increased and the demand is elastic
C. Reduced and the demand is inelastic
D. Increased and the demand is inelastic