If marginal cost is less than average variable cost, average variable cost will:
A. increase as output rises.
B. decrease as output rises.
C. equal average total cost.
D. remain constant as output rises.
Answer: B
You might also like to view...
Assume that the commercial banking system has checkable deposits of $10 billion and excess reserves of $1 billion at a time when the reserve requirement is 20%. If the reserve requirement is now raised to 30%, the banking system then has ________.
A. excess reserves of only $.5 billion B. excess reserves of $2 billion C. a deficiency of reserves of $.5 billion D. neither an excess nor a deficiency of reserves
Which of the following is an example of a natural monopoly?
A) the Pittsburgh Penguins hockey team, a National Hockey League team B) Ford Motors, the large automobile producing company C) Florida Power and Light, an electric utility in Florida D) Sony, the Japanese producer of the Playstation III E) JCPenney, the large department store chain
If the quantities of labor and capital in an economy each increase by the same x percent, which of the following will increase by x percent?
A) marginal product of capital B) economic profits C) share of capital income in national income D) rental price of capital E) none of the above
Economic theory predicts that
(a) market forces impose stiff penalties on profits whenever enterprises discriminate against individuals on any basis other than productivity. (b) government intervention is required to combat discrimination. (c) market mechanisms and government interventions are weak in addressing issues of discrimination. However, government is relatively stronger. (d) discrimination is a necessary part of life private and public life.