Figure 8.2 presents a firm's marginal cost, average total cost, and average variable cost curves. The firm minimizes average variable costs by producing ________ units.
A. 50
B. 100
C. 150
D. 200
Answer: B
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Tacos and pizza are substitutes. If a 2 percent change in the price of a taco leads to a 4 percent change in the demand for pizza, the cross elasticity of demand equals
A) -1/2. B) 1/2. C) 2. D) -2. E) 4.
The argument advanced by Milton Friedman for adopting a monetary growth rule is that
A) active monetary policy potentially destabilizes the economy. B) a constant rate of growth in the money supply would eliminate the booms and recessions that make up the business cycle. C) the growth rate of M1 has been unstable. D) the Fed can control the money supply, but not the level of interest rates.
To claim that a lottery winner who is to receive $1 million per year for twenty years has won $20 million ignores the process of
A) face value. B) par value. C) deflation. D) discounting the future.
Asymmetric information can cause a market to go out of existence
Indicate whether the statement is true or false