In a graph of a typical firm's AFC, ATC, and AVC curves, the
A. AVC curve crosses the MC curve at the point where the MC is at its minimum.
B. distance between the ATC curve and the AVC curve equals the AFC.
C. distance between the AVC curve and the AFC curve equals the ATC.
D. AVC curve lies above the ATC curve.
Answer: B. distance between the ATC curve and the AVC curve equals the AFC.
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A demand curve is defined as the relationship between
A) the income of consumers and the quantity of a good that producers are willing to sell. B) the income of consumers and the quantity of a good that consumers are willing to buy. C) the price of a good and the quantity of that good that producers are willing to sell. D) the price of a good and the quantity of that good that consumers are willing to buy.
Refer to Table 16.1. Consider the data in the table above (in billions of dollars) for an economy. Gross domestic product (in billions of dollars) for this economy equals
A) $2,700. B) $2,525. C) $2,350. D) $2,100.
The firm in the figure above is in monopolistic competition. It will produce
A) 10 units. B) 20 units. C) 30 units. D) 40 units.
What do we mean when we state that a particular principal-agent payment scheme is inefficient?
A) The principal and agent could find another agreement that would increase the sum of the owner's revenue and the worker's payment. B) The agreement involves the highest level of effort for the worker. C) The agreement leads to the lowest level of revenue for the owner. D) The sum of the income taxes paid by the owner and the worker is too high.