An ethanol processing plant operates relatively efficiently when operating at its designed "capacity". The firm is willing to pay more for delivery of corn to maintain this level of output. This indicates that the firm is likely to experience ______ (higher, lower, the same) average total costs operating at less than this level of output.
a. Higher
b. Lower
c. The same
a. Higher
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Consider a nation that has a comparative advantage in the production of goods using unskilled labor. What types of workers will benefit from increased trade, and what type will lose?
What will be an ideal response?
If capital per worker rises
A) labor productivity decreases. B) no technological progress occurs. C) labor productivity increases. D) firms respond by raising their prices.
Monetary policy can
A) shift the short-run trade-off between inflation and unemployment if it affects expected inflation. B) shift the long-run trade-off between inflation and unemployment through changes in cyclical unemployment. C) shift both the short-run and long-run trade-offs between inflation and unemployment if changes in policy are credible. D) shift neither the short-run nor long-run Phillips curve trade-offs between inflation and unemployment.
Davy's Doggie Daycare rents a warehouse and field for $2,000 a month to house its boarding pooches. Farmer Fred owns the property, he used to use it for farming and made $3,000 a month, but has since retired. What is the cost of the warehouse and field to Davy?
A. It is an explicit cost of $2,000. B. It is an implicit cost of $3,000. C. It is an implicit cost of $0. D. There is both an explicit and implicit cost totaling $5,000.