In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices.
B. lower prices.
C. lower output.
D. None of these is true.
Answer: D
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Assume the following cost information about Fred's widget company: Its fixed cost is $27, and its total variable cost is $18 for 1 unit; $33 for 2; $45 for 3; $60 for 4; and $78 for 5 . Given this information: a. average fixed cost rises from an output of four to an output of five
b. average fixed cost is greater than marginal cost for the second unit produced. c. the output level which minimizes average total cost is four units. d. average variable cost rises, but average total cost falls, as output increases from four to five.
In a proportional tax system each individual would pay the same percentage of his or her income in taxes
a. True b. False Indicate whether the statement is true or false
The portion of deposits that banks need to hold at the Central Bank is:
(a) The required reserve ratio; (b) The discount rate; (c) The open market operation; (d) The interest rate.
Aggregation means the:
A. participation in national economic policy discussions. B. enhancement of the power and wealth of a nation. C. worsening of an economic situation. D. adding up of individual economic variables to obtain economy wide totals.