When the average variable cost curve is at its minimum point, average product will be:
A. at its maximum.
B. decreasing.
C. at its minimum.
D. increasing.
Answer: A
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Industries often lobby against the removal of regulations because
a. the regulations often enforce a de facto cartel agreement. b. their customers would be made worse off without government-proscribed standards. c. the largest firms could then dominate the industry. d. deregulation would cause higher entry prices for new firms.
If D represents the level of decentralization of corporate decisionmaking, and A and C are positive constants, then Benefits = B × D and Costs = A × D + C × D2. The optimal level of decentralization occurs where the
A. sum of the squares of the distance between the benefits and costs curves is minimized. B. level of benefits is greatest. C. vertical distance between the benefits and costs curves is greatest. D. horizontal distance between the benefits and costs curves is greatest.
Suppose that the average equilibrium monthly rental price of apartments and rooms in a college town had been steady at $600, but then the college expanded enrollment from 10,000 to 12,000, and suddenly there was a shortage of rental housing at the prevailing price of $600 . Which of the following is most likely to be true?
a. The shortage occurred because demand increased, and a new market equilibrium will feature higher rental prices and more rental units available on the market. b. The shortage occurred because demand decreased, and a new market equilibrium will feature lower rental prices and fewer rental units available on the market. c. The shortage occurred because demand increased, and a new market equilibrium will feature higher rental prices and fewer rental units available on the market. d. The shortage occurred because supply increased, and a new market equilibrium will feature lower rental prices and fewer rental units available on the market.
When successfully implemented, contractionary fiscal policy will cause
A. a leftward shift of the aggregate demand curve. B. a downward movement along the aggregate demand curve. C. an upward movement along the aggregate demand curve. D. a rightward shift of the aggregate demand curve.