The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000.
When the firm uses 120 units of labor, what is average total cost at this output?
A. $40
B. $84
C. $120
D. $59
E. $190
Answer: D
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Disposable income does not influence the amount of consumer expenditures.
Answer the following statement true (T) or false (F)
A linear demand curve
A. will have an ever rising total revenue function. B. becomes less elastic as price falls. C. always has a constant elasticity. D. can have constant elasticity if its slope is more than one.
If real GDP increases by 5 percent and the population increases by 10 percent during the same period, real GDP per capita
a. increases. b. decreases. c. remains unchanged. d. increases if prices rise.
If banks engage in fractional reserve banking, it means that
A. they hold less than 100 percent of their deposits as reserves. B. they never run short of currency. C. a fraction of their legal reserves are held as top-grade government securities. D. they do not hold any excess reserves.