The minimum possible short-run average costs are equal to long-run average costs when
A) the plant is producing at its short-run minimum point.
B) short-run and long-run costs are declining.
C) the long-run curve is at a minimum point.
D) production is at any point on the LAC curve.
Answer: C
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Firms hire more labor as long as
A) the real wage rate is greater than the additional output the labor produces. B) extra labor will produce more output. C) the real wage rate is less than the additional output the labor produces. D) the nominal wage rate exceeds the real wage rate. E) the nominal wage rate is less than the real wage rate.
Fearing that the economy was overheating, policymakers instituted a temporary tax surcharge in 1968. This temporary surtax
A) drastically reduced both savings and consumption. B) increased savings and reduced consumption. C) reduced savings but had little effect on consumption. D) successfully reduced consumption sufficiently to cool down the economy.
Which of the following is not true with regard to economic profit?
a. economic profit equals total revenue minus total cost b. economic profit excludes implicit cost c. economic profit is any profit greater than a normal profit d. firms attempt to maximize economic profit e. long-run economic profit is always zero in perfect competition
Which of the following statements is correct?
a. Slope is the ratio of the vertical change (the rise or fall) to the horizontal change (the run). b. A direct relationship is one in which two variables change in the same direction. c. An inverse relationship is one in which two variables change in opposite directions. d. An independent relationship is one in which two variables are unrelated. e. All of these.