Which of the following is true in the short run at the output level where average total cost is at its minimum?
a. Marginal cost equals average total cost.
b. Average variable cost equals fixed cost.
c. Marginal cost equals average variable cost.
d. Average total cost equals average fixed cost.
e. Average total cost equals average variable cost.
A
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The figure above shows the supply curve for soda. The market price is $1.00 per soda. The marginal cost of the 20,000th soda is
A) $0.00. B) $0.50. C) $1.00. D) more than $1.00. E) None of the above answers is correct.
Which of the following has served most recently as Chairman of the Board of Governors of the Federal Reserve System?
A) Nancy Pelosi B) Alan Greenspan C) Ben Bernanke D) Paul Volcker
Which of the following correctly describes the profit-maximizing level of output selected by a monopolistically competitive firm in the short run?
a. Output is set in the short run where marginal cost equals price. b. Output is set in the short run where marginal cost equals marginal revenue. c. Firms will shut down in the short run even if price exceeds average variable cost at the rate of output selected by the firm. d. Firms will shut down in the short run even if price equals marginal cost.
Suppose a central bank takes actions that will lead to a higher inflation rate. The public, however, is slow to adjust its expectation of inflation. Then, in the short run, unemployment
a. rises. As inflation expectations adjust, the short-run Phillips curve shifts right. b. rises. As inflation expectations adjust, the short-run Phillips curve shifts left. c. falls. As inflation expectations adjust, the short-run Phillips curve shifts right. d. falls. As inflation expectations adjust, the short-run Phillips curve shifts left.