Engineers for the Off Road Skateboard Company have determined that a 10% increase in all inputs will cause output to increase by 5%. Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases.
A. average fixed costs to increase
B. total cost to decrease
C. average costs to decrease
D. average costs to increase
Answer: D
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When the economy is operating at a level of real GDP that is greater than its potential level, we know that
A) the structural rate of unemployment is negative. B) the frictional unemployment is zero. C) the actual unemployment rate is greater than the natural rate of unemployment. D) the cyclical rate of unemployment is negative.
A production function represents:
A. the relationship between the quantity of inputs and the quantity of outputs. B. the relative values of the inputs and modes of production. C. the relative costs of the inputs across various modes of production. D. the relationship between the cost of the inputs and the revenue generated by the outputs.
The product approach to calculating GDP
A. adds together the market values of final goods and services produced by domestic and foreign-owned factors of production within the nation in some time period. B. is superior to the income approach because, unlike the income approach, it gives us the real value of output. C. includes the market value of goods and services produced by households for their own consumption but excludes the value of the underground economy. D. adds together the market values of final goods, intermediate goods, and goods added to inventories.
Which of the following results in a "parallel" shift outward of your indifference curves between gasoline and movie rentals?
A) any decrease in the prices of gasoline and movie rentals B) an equal percentage decrease in the prices of gasoline and movie rentals C) an increase in your income D) none of the above