If the government raised land taxes $20/acre, this would increase the farmer's average fixed cost. How would that affect (a profit maximizing) farmers' decision about the quantity of corn to produce in the short run?
a. It would have little change because in the short run the farmer will consider only the Average Variable Cost (AVC) in making a decision on quantity supplied
b. It will decrease the quantity the farmer is willing to supply because the Average Variable Cost (AVC) will increase for the farmer
c. It will decrease the quantity the farmer is willing to supply because the farmer considers all costs in the short run in making a decision about quantity supplied
d. None of the above
a. It would have little change because in the short run the farmer will consider only the Average Variable Cost (AVC) in making a decision on quantity supplied
You might also like to view...
The limited liability enjoyed by Jitters Coffee Company Corporation is a benefit that protects
A) its employees. B) its Board of Directors. C) its stockholders. D) all of the above
The rational expectations hypothesis implies that when macroeconomic policy changes
A) the economy will become highly unstable. B) the way expectations are formed will change. C) people will be slow to catch on to the change. D) people will make systematic mistakes.
According to the classical model, an increase in the American nominal money supply would cause the nominal exchange rate to ________ and the real exchange rate to ________
A) depreciate; appreciate B) appreciate; depreciate C) depreciate; remain unchanged D) appreciate; remain unchanged
If a dominant firm is charged with refusal to deal under antitrust law, it is being charged because
A) the firm will not set its price at the regulated rate. B) it is refusing to sell a key input to downstream rivals, thereby reducing or destroying competition. C) it is refusing to cooperate with antitrust authorities, such as the Department of Justice. D) it will sell its products only to people who agree to buy only from it and not from rival firms.