In the short run, the marginal cost of the first unit of output is $20, the marginal cost of producing the second unit of output is $16, and the marginal cost of producing the third unit of output is $12. The firm's total variable cost of producing three units of output is:
A. $12.
B. $16.
C. $20.
D. $48.
Answer: D
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A citizen of Mexico who has lived in El Paso during the past three years has just sent $100 to relatives in Mexico for Christmas. This transaction is
A) counted in the U.S. balance of payments as a current account item. B) counted in the U.S. balance of payments as a surplus item. C) counted in the U.S. balance of payments as an export item. D) none of the above.
Assume that due to unfavorable conditions in a prime honey-producing area, the price of honey increases by 50 percent. The quantity consumed of herbal tea declines immediately by 25 percent. Everything else held constant, the:
a. cross-price elasticity of demand for herbal tea and honey is negative, and therefore the two goods are substitutes. b. cross-price elasticity of demand for herbal tea and honey is negative, and therefore the two goods are complements. c. cross-price elasticity of demand for herbal tea and honey is positive, and therefore the two goods are substitutes. d. cross-price elasticity of demand for herbal tea and honey is positive, and therefore the two goods are complements. e. cross-price elasticity of demand cannot be determined from the information provided.
Which of the following statements is correct?
a. Theory and hypothesis are interchangeable terms for the same thing. b. A hypothesis may result from a tested and confirmed theory. c. A theory may result from a tested and confirmed hypothesis. d. A hypothesis is a theory whose formulation relies on mathematics.
The graph shown portrays a subsidy to buyers. Once the subsidy is in place, the buyers pay ________ and the sellers receive ________; the difference is ________.
A. $30; $46; the amount of the subsidy B. $24; $40; the amount of government revenue C. $24; $40; the amount of the subsidy D. $40; $24; the amount of the subsidy