Which of the following is true at the output level where average total cost is at its minimum?
A) Marginal cost equals average variable cost. B) Average variable cost equals fixed cost.
C) Average total cost equals average fixed cost. D) Marginal cost equals average total cost.
D
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How are the fundamental economic decisions determined in Cuba?
A) The United Nations decides because Cuba is a developing economy. B) These decisions are made by the country's elders who have had much experience in answering these questions. C) The government decides because Cuba is a centrally planned economy. D) Individuals, firms, and the government interact in a market to make these economic decisions.
It is generally agreed that when the rate of monetary growth exceeds the rate of growth in real GDP in the long run
A. the inflation rate will increase every year by a constant rate. B. real GDP will grow at a faster rate. C. the average price level will tend to decrease over time. D. the average price level will tend to increase over time.
Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Acme ($/day)$750$800$1,000$1,400$2,000Cost to FirmCo ($/day)$500$750$1,200$2,200$4,000 Suppose the firms are both currently using process A. If the government requires each firm to reduce pollution by 20 percent, then the total cost to society of this policy will be ________ per day.
A. $1,550 B. $950 C. $300 D. $2,350
If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product, this product is
A) a necessity. B) an income elastic good. C) an inferior good. D) a luxury good.