Suppose Chip's Chips produces bags of potato chips. An example of a variable cost for this firm would be:
A. the factory building.
B. the deep fryer.
C. the potato peeling machine.
D. None of these is an example of a variable cost.
Answer: D
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Suppose that an indifference curve for Jack is drawn measuring quantities of pencils along the horizontal axis and quantities of pens along the vertical axis. If the marginal value of an additional pencil is 3 pens for Jack, the slope of his indifference curve in this range is
a. 1/3. b. 3. c. 6. d. dependent upon the prices of the two goods
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Advertising is a ________ cost that is incurred by ________
A) variable; monopolies B) variable; perfectly competitive firms C) fixed; perfectly competitive firms D) fixed; monopolistically competitive firms E) marginal; monopolistically competitive firms
If higher prices cause buyers to shop at discount stores, the CPI has
A) a new goods bias. B) a quality change bias. C) a commodity substitution bias. D) an outlet substitution bias. E) a discounted bias.