Costs that are "fixed":
A. are those that will never change.
B. depend on what timescale you are thinking.
C. vary with output, but not with resource prices.
D. None of these is true.
Answer: B
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Which of the following would indicate that price is temporarily above its market equilibrium?
A) There are a number of producers who are left with unwanted inventories. B) There are a number of customers who are looking for a good but cannot find sellers. C) New firms decide to enter the market. D) The government must step in and impose a tax on the good.
Suppose the demand for labor shifts rightward due to economic growth, but the supply of labor remains unchanged. How does this affect the market outcome under an efficiency wage equilibrium?
A) Efficiency wage and employment are higher B) Efficiency wage is lower, employment is higher C) Efficiency wage is higher, employment is lower D) Efficiency wage and employment are lower
Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if ?=0.25 then growth of output can be estimated to be:
A. 4.25%. B. 4.00%. C. 6.00%. D. 4.75%.
Which of the following is necessary for allocative efficiency to be achieved?
A) Marginal benefit must be maximized. B) Marginal cost must be minimized. C) Marginal benefit must equal marginal cost. D) The difference between marginal benefit and marginal cost must be maximized. E) Production must be at a point inside the production possibilities frontier.