What do economists call the sum of a firm’s fixed costs and its variable costs?
a. implicit cost
b. total cost
c. sunk cost
d. marginal cost
b. total cost
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A competitive firm will shut down its operations in the short run when the market price falls below its
a. marginal revenue. b. marginal cost. c. average cost. d. average variable cost.
In Figure 4-6 above, with IS0 shifting to IS1, movement from points 0 to 2 requires the real money supply to ________
A) rise by the same percentage as income B) fall by the same percentage as income C) remain constant D) none of the above
Suppose a city that operates local electric and natural gas companies wants to raise revenues by increasing its rates for electricity and natural gas. The price rise will increase city revenues if the elasticity of demand for electricity and natural gas is
a. inelastic. b. elastic. c. negative. d. equal to -1.
For which of the following policies is there a significant implementation lag?
a. fiscal policy and monetary policy b. fiscal policy but not monetary policy c. monetary policy but not fiscal policy d. neither monetary policy nor fiscal policy