Which of the following is true about average fixed cost?
A. Average fixed cost has a U-shape, and marginal cost crosses average fixed cost at its minimum point.
B. Average fixed cost does not vary as output increases.
C. Average fixed cost is the difference between marginal cost and average total cost.
D. Average fixed cost is total fixed cost divided by the quantity of output produced, and it declines steadily as output increases.
Answer: D
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Which of the following transactions takes place in factor markets?
A) Henry receives a commission from his employer for selling a new automobile. B) Jake purchases 1,000 shares of stock in the Wal-Mart Corporation through his online trading account. C) Sam enters the winning bid on a grand piano at a local auction. D) Justin receives $30 in exchange for mowing his neighbor's lawn. E) Lucille receives a $500 check from the U.S. Social Security Administration.
The curve that shows alternative combinations of the price level and real income that result in equilibrium in both the real goods and the money markets is called the:
A) aggregate demand curve. B) short-run aggregate supply curve. C) long-run aggregate supply curve. D) none of the above.
If actions to reduce the expected cost of an accident are equally effective and managers authorize the least expensive actions first, the marginal cost of additional actions ________.
A) is zero B) decreases C) is constant D) increases
How much would Nadia be willing to pay for the insurance?
a. $900 b. $1000 c. $1100 d. $1200