Which of the following statements is correct?
A) In the short run, if a firm chooses to produce no output (i.e., shut down) its total costs of production will equal its total fixed costs.
B) If a firm decides to shut down, its short-run total costs will equal 0.
C) As a firm increases output in the short run, the change in total costs is equal to the change in total variable costs.
D) A firm minimizes its total costs of production when average variable cost is minimized.
C
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After a tariff is imposed on a good, the price of the good
A) does not change. B) falls. C) rises. D) rises only if the domestic demand for the good does not change. E) might rise, fall, or not change depending on whether the government did or did not simultaneously impose a quota.
A persistent shortage of yen at a given fixed exchange rate (in dollars per yen) is evidence that the yen is ________ versus the dollar. This shortage can be reduced or eliminated through a ________ of the yen
A) overvalued; revaluation B) undervalued; devaluation C) overvalued; devaluation D) undervalued; revaluation
Which of the following is included in the investment category under the expenditure approach to GDP accounting?
a. stocks b. bonds c. durable goods d. additions to business inventories
Suppose the economy is at full employment with a high inflation rate. Which combination of government policies is most likely to reduce the inflation rate?
A. Buy government securities in the open market and increase taxes B. Buy government securities in the open market and decrease taxes C. Sell government securities in the open market and increase government spending D. Sell government securities in the open market and decrease government spending