Economists calculate average variable cost by ______ over a set period of time.
a. dividing marginal cost by output
b. dividing variable cost by output
c. multiplying variable cost by output
d. subtracting variable cost from total cost
b. dividing variable cost by output
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Starting from long-run equilibrium, a sharp drop in oil prices results in ________ output in the short run and ________ output in the long run.
A. lower; higher B. lower; potential C. higher; higher D. higher; potential
Which of the following is an example of division of labor?
a. an author writing a book one chapter at a time b. a firm trying to get rid of a labor union c. separating resources into four categories: land, labor, capital, and entrepreneurial ability d. allocating revenue among a firm's resource suppliers e. dividing an assembly process into separate steps
A resource owner will supply resources up to the point where marginal resource cost is equal to marginal revenue product
a. True b. False
In practice, money supply and short-term interest rates are determined by the
a. Treasury and Commerce departments. b. Federal Open Market Committee. c. Board of Governors. d. House and Senate.