The vertical distance between a firm's average total cost curve and its average variable cost curve is its
a. marginal cost
b. sunk cost
c. total variable cost
d. total fixed cost
e. average fixed cost
E
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Potential GDP in the United States
A) declines over time. B) changes over a given business cycle. C) does not change over time. D) grows as the economy grows.
Many professional sports athletes have incentive clauses in their contracts. These indicate that
A) the team owner has asymmetric information. B) the athlete might engage in moral hazard, which the team owner wishes to avoid. C) the athlete might engage in adverse selection, which the team owner wishes to avoid. D) the athlete has stronger negotiators.
An example of a government policy to provide a framework within which the private sector can operate productively is:
A. government ownership of capital. B. the suppression of political dissent. C. maintaining a well-functioning legal system. D. the taxation of savings.
The legislation that prohibited "every contract, combination, ...or conspiracy" that limits competition is the:
A. Federal Trade Commission Act. B. Clayton Act. C. Sherman Act. D. Celler-Kefauver Act.