If average fixed cost exceeds average variable cost at a particular level of output:
a. Profits must be negative
b. That fact is meaningless for deciding the quantity of output to produce.
c. Output levels are probably quite low relative to the designed capacity of the production facility.
d. Both b and c. are likely true.
d
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One of the key income tax topics debated during the 2008 Presidential election was whether the
A. 1986 tax increases should be repealed in 2011. B. Iraqi oil revenues should be taxed by the U.S. to provide care for disabled Iraqi War veterans. C. 2003 tax cuts should be allowed to expire in 2011. D. national sales tax should be abolished and replaced with a single income tax rate of 21%.
Production efficiency is represented by ________ a production possibilities frontier
A) all points on B) all points inside C) all points outside D) a movement along E) only one point on
Which of the following will not lead to an increase in the demand for labor for a firm producing automobiles?
A) a decrease in labor productivity B) an increase in the price of robots that are used to solder parts of the car together C) an increase in the demand for automobiles D) an increase in the price of automobiles
If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:
A. may be either greater or less than $5. B. will also be $5. C. will be less than $5. D. will be greater than $5.