You operate a factory that produces beach towels. Your current level of output equals 2,000 towels per week. Your weekly variable cost equals $8,000 . If your total cost each week equals $9,000 . it follows that:
a. the average variable cost of production equals $2 per towel.
b. the average total cost of production equals $4 per towel.
c. the average total cost of production equals $4.50 per towel.
d. the average total cost of production equals $8 per towel.
c
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In the basic Keynesian model, a decrease in government purchases:
A. reduces potential output. B. increases potential output. C. increases short-run equilibrium output. D. reduces short-run equilibrium output.
If net capital flows were -28 billion and domestic investment was 17 billion, then the amount of domestic savings was
A) -11 billion. B) 45 billion. C) 11 billion. D) -9 billion.
Government failure
A. Results when government intervention fails to improve market outcomes. B. Occurs whenever the government intervenes in the market. C. Occurs whenever there is market failure. D. Does not occur; only market failure occurs.
The figure below shows the demand curve, marginal revenue curve, marginal cost curve and average total cost curve for a monopolist. 
The socially optimal level of output is:
A. 4 units per day. B. 5 units per day. C. 10 units per day. D. 8 units per day.