As long as price exceeds AVC, the firm is better off
A) continuing production.
B) closing.
C) raising its price.
D) cutting price.
Answer: A
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Refer to Table 18.1. The opportunity cost of a glove in Panama is
A) 1/8 of a hat. B) 3/4 of a hat. C) 4/3 hats. D) 8 hats.
A sign that the Federal Reserve is moving to raise interest rates would be
A) an increase in bank reserves. B) large purchases of Treasury securities by the Federal Reserve. C) a widening gap between the Treasury bill yield and the discount rate. D) a narrowing gap between the Treasury bill yield and the discount rate.
Sarah can bake 200 cookies in an hour or watch her favorite tv show. If she chooses to watch her show, her opportunity cost is
a. 200 cookies b. 100 cookies c. 150 cookies d. Need more information
When drawing a production possibilities frontier, all of the following are usually assumed except one. Which is the exception?
a. The quantity of resources is rapidly growing. b. Technology is fixed. c. Resources can be shifted between production of the two goods. d. The production possibilities frontier is drawn for a particular time period. e. Resources are fully and efficiently employed.