Engineers for the Off Road Skateboard Company determine that a 12% increase in all inputs will cause a smaller percentage increase in output. Assuming that input prices remain constant, you correctly deduce that such a change in inputs will cause ________ as output increases.
A. average costs to decrease
B. average fixed costs to increase
C. total costs to decrease
D. average costs to increase
Answer: D
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Refer to the above figure. The curve reflects
A) the law of diminishing marginal product in labor. B) the law of diminishing marginal product in capital. C) the law of increasing marginal product in labor. D) the law of increasing marginal product in capital.
Which of the following goods is likely to have an income elasticity of demand greater than one?
A) Salt B) Gasoline C) Diamond jewelry D) Bread
Dennis notices that jackets are on sale for $99. In this case money is functioning as a
A) medium of exchange. B) unit of account. C) store of value. D) payments-system ruler.
The implementation lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.