The cost of a variable input, such as the wage paid to workers, decreases. This decrease shifts the
A) total fixed cost curve downward.
B) marginal product of labor curve downward.
C) average variable cost curve downward.
D) marginal product of labor curve upward.
C
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The Fed has been called "the lender of last resort" because it
A) is the biggest bank in the country. B) is the only lender to the federal government. C) serves as the last place to acquire loans for banks suffering cash management, or liquidity, problems. D) a and b E) all of the above
In a free market system, competition generates economic efficiency only when
A) individuals take into account the full opportunity cost of their actions. B) consumers are motivated by a sense of the greater good, not their own self-interest. C) firms are motivated by a sense of the greater good, not their desire for profit. D) economic decisions are taken out the hands of individuals and placed in the hands of government officials.
Which of the following would NOT be considered a fixed cost of production?
A) wages paid to labor B) the opportunity cost of capital C) interest payments on a loan D) insurance payments on plant and equipment
One of the consequences of the overstatement of the CPI is that
A. Social Security taxes are lower than they would otherwise be. B. the poverty line is lower than it would otherwise be. C. personal income taxes are lower than they would otherwise be. D. Social Security payments are lower than they would otherwise be.