What is the relationship between average fixed cost and output?
What will be an ideal response?
Because average fixed cost is equal to total fixed cost divided by the number of units of output and total fixed cost does not change with output, average fixed cost decreases as the level of output increases.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
The marginal product of the second widget worker hired is
A) 2. B) 8. C) 10. D) 12.
If resources A and B are complementary and employed in fixed proportions:
A. a change in the price of A will have no effect on the quantity of B employed. B. an increase in the price of A may either increase or decrease the demand for B. C. an increase in the price of A will increase the demand for B. D. an increase in the price of A will decrease the demand for B.
A situation in which a market economy leads to too few or too many resources going to a particular economic activity is known as
A. a market failure. B. competition. C. excessive competition. D. creative destruction.