In order to determine the average variable cost, the firm's variable costs are divided by _______________________.
a. its fixed costs
b. the quantity of output
c. its average costs
d. diminishing marginal costs
b. the quantity of output
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If the wage that a competitive firm must pay its workers exceeds their value of marginal product, the firm will
A) decrease the quantity of labor it employs. B) increase the quantity of labor it employs. C) lower the price of the good. D) raise the price of the good.
The tables above show the marginal costs and benefits from production of paper. If the efficient level of output is achieved by imposing a tax on paper producers, the government collects tax revenue equal to
A) $64,000. B) $56,000. C) $72,000. D) $48,000.
Jim has estimated elasticity of demand for gasoline to be 0.7 in the short-run and 1.8 in the long run. A decrease in taxes on gasoline would:
a. lower tax revenue in both the short and long run. b. raise tax revenue in both the short and long run. c. raise tax revenue in the short run but lower tax revenue in the long run. d. lower tax revenue in the short run but raise tax revenue in the long run.
In popular usage the term investor is used to refer to
a. a speculator in futures markets. b. a buyer of risky assets. c. an entrepreneur who purchases machinery and equipment to expand production. d. individuals whose primary source of income is from returns on financial assets.