Which one of the following statements is FALSE?
A. ATC = AFC + AVC
B. MC = TC divided by Q
C. AFC = TFC divided by Q
D. TC = TFC + TVC
Answer: B
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The above figure shows the U.S. market for 1 carat diamonds. Suppose the United States imposes the import quota shown in the figure. With the import quota, how many diamonds can be imported?
A) 500,000 B) 700,000 C) 400,000 D) 900,000 E) 300,000
The switch to the use of ethanol in gasoline is driven primarily by its relatively lower price. Assuming a competitive market, what effect would this change have on the equilibrium price and output for gasoline?
A) Price rises, output falls. B) Price falls, output rises. C) Price rises, output rises. D) Price falls, output falls.
In a closed economy, national savings is:
A. equal to national investment. B. the sum of the savings of individuals and corporations plus the savings of the government. C. the sum of public savings plus private savings. D. All of these are true.
The government's decisions about spending and taxation that affect employment, output, and inflation are called
A. Keynesian policy. B. short-term policy. C. multiplier policy. D. fiscal policy.