Which of the following statements is true of the relationship among the average cost functions?
A) ATC = AFC - AVC
B) AVC = AFC + ATC
C) AFC = ATC + AVC
D) AFC = ATC - AVC
D
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An explanation for the low saving rate in the United States consistent with the demonstration effect includes:
A. well-developed financial markets making it easy to borrow against home equity. B. large and persistent capital gains. C. households spending beyond their means to keep up with community standards. D. relatively generous government assistance for the elderly and large down payments required for home purchases.
Refer to the scenario above. If both economies have identical depreciation rate, then:
A) economy A's steady state equilibrium will lie to the left and above economy B's steady state equilibrium. B) economy A's steady state equilibrium will lie to the right and below economy B's steady state equilibrium. C) economy A's steady state equilibrium will lie to the left and below economy B's steady state equilibrium. D) economy A's steady state equilibrium will lie to the right and above economy B's steady state equilibrium.
Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000 . The annual explicit costs of the materials used to make the cookie jars are $54,000 . Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. Christine could earn $6,000 per year as a tax preparer
What is the annual economic profit of her cookie jar business? a. $36,000 b. $35,950 c. $30,000 d. $29,950
In a market with supply and demand curves as shown below, a price ceiling of $2.50 will result in:
A. A surplus of 10 units
B. A shortage of 10 units
C. No shortage or surplus
D. A black market price greater than $2.50