What is the shape of the average fixed cost curve for a firm in the short run?
a. U-shaped.
b. A curve that constantly increases as output expands and eventually approaches infinity at high rates of output.
c. A vertical line.
d. A curve that declines as output expands and approaches the horizontal-axis when output is large.
d
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An “opportunity cost” may be described as
A. the value of what must be given up. B. the opportunity foregone. C. the value of the next best alternative. D. the correct measure of cost. E. All of these responses are correct.
A tax inversion merger ________ legally reduce the combined firms' taxes and these mergers ________.
A) can; are only horizontal mergers B) cannot; are only vertical mergers C) can; can be horizontal or vertical mergers D) cannot; can be horizontal or vertical mergers
Sanford wants to start up his own business, and needs $50,000 to get it off the ground. He can either withdraw it from his savings account, where he currently earns 2 percent, or he can take out a loan for $50,000 and pay 2 percent interest. Sanford should compare:
A. the explicit cost of $1,000 to the implicit cost of $1,000 and realize it will cost the same whether he borrows it or uses his savings for the venture. B. the implicit cost of $51,000 to the explicit cost of $1,000 and choose to borrow the money. C. the explicit cost of $1,000 to the implicit cost of $51,000 and choose to borrow the money. D. the implicit cost of $1,000 to the explicit cost of $51,000 and choose to use his savings.
Suppose that the economy is at full employment and aggregate demand increases by more than it is anticipated to increase. Other things remaining the same, ________.
A. long-run aggregate supply decreases B. real GDP remains at potential GDP C. real GDP increases above potential GDP D. real GDP decreases below potential GDP