If a firm decreases production, then its:
A. variable costs decrease.
B. fixed costs decrease.
C. total costs stay the same.
D. None of these is true.
A. variable costs decrease.
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
If employers were required by law to increase the wages paid to secretaries by 40 percent, which consequence could we most confidently predict?
A) More secretaries would be employed. B) Secretaries would begin to earn more than they are worth to their employers. C) The marginal value of secretaries would increase by about 40 percent. D) The total amount of wages paid to secretaries would decrease. E) The total amount of wages paid to secretaries would increase.
An increase in both supply and demand causes which of the following?
a. Equilibrium price falls. b. Equilibrium price rises. c. Equilibrium price change is indeterminate. d. Equilibrium quantity decreases. e. Equilibrium quantity change is indeterminate.
If the single-input producer choice set is fully convex, the first order conditions of the profit maximization problem are necessary but not sufficient for identifying the profit maximizing production plan.
Answer the following statement true (T) or false (F)