Can a firm's average variable costs be falling if they are less than the firm's marginal costs? Explain
No, because average variable cost is determined by marginal cost. If the marginal cost is higher than the
average variable cost, then they are pulling the average variable costs up, and so the average variable cost
will be rising.
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Productivity in manufacturing sectors has risen faster than in service sectors
a. True b. False Indicate whether the statement is true or false
Decreasing returns to scale is strictly a short run phenomenon for firms.
Answer the following statement true (T) or false (F)
Suppose an economist collects the following data between May and December of a given year: gasoline prices rose sharply, consumer incomes remained constant, consumers purchases of fuel efficient vehicles remained constant from the previous year, the size of the population did not change, sales of gasoline decreased by 15 percent. Which of the following theories could be tested with this information?
A. When the price of gasoline rises, gasoline purchases fall. B. When consumer incomes rise, gasoline purchases rise. C. When the population increases, purchases of fuel efficient vehicles increase. D. No economic theory could be tested with this information.
As the dollar price of the euro increases
A) the demand for euros will increase. B) the price of French goods will fall for U.S. residents. C) French residents will purchase more U.S. goods. D) U. S. residents will increase their travel to France.