Suppose a business experiences a sudden increase in its fixed costs. For example, suppose property taxes increase dramatically. What impact, if any, will this have on the firm's AFC (average fixed cost), AVC (average variable cost), ATC (average total cost) and MC (marginal cost) and therefore these cost curves? Why?

A war destroys much of the capital stock in the country of Omega. As a result, holding other factors constant, the real wage in Omega will ________ and employment in Omega will ________.

A. increase; decrease B. decrease; decrease C. increase; not change D. increase; increase

Government regulations requiring firms that desire to sell securities in financial markets to disclose all available information

A) eliminate the adverse selection problem (when rigorously enforced). B) increase the difficulty that young firms may have in raising funds. C) eliminate the moral hazard problem in securities markets. D) fail to eliminate the adverse selection problem, in part because they do not greatly reduce the difficulty that young firms have in raising funds.

If a bank gets a $100,000 new deposit, chooses to lend out $85,000, and increases its excess reserves by $5,000 at the same time, then the reserve requirement is: a. 10%

b. 15%. c. 20%. d. unable to be determined from the information given.

In a free market economy,

A. problems with externalities can never be solved. B. public goods will be efficiently provided by the private sector. C. detrimental externalities are rare. D. externalities can be solved by policy makers using market methods.