The average variable cost of producing 250 sundaes is $5. At this level of output, average variable cost is minimized. Which of the following statements is true?
A. Average fixed cost is minimized at an output less than 250 sundaes.
B. Total cost of producing 250 sundaes is $1,250.
C. Average total cost is minimized at an output greater than 250 sundaes.
D. Marginal cost of the 251st sundae is $1,250.
Answer: C
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The figure above shows the costs and benefits associated with producing paper. What is the unregulated competitive market level of output?
A) 0 B) 4 tons C) 6 tons D) More than 6 tons E) None of the above answers is correct.
Suppose that the capital stock initially is 1000, the depreciation rate is 0.08, and investment is 220. This makes the net growth of the capital stock
A) 300. B) 237.6. C) 202.4. D) 140.
Which of the following is correct?
a. In unionized industries, wages are above the level that would prevail in competitive markets. b. The introduction of a union in some industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy. c. Critics argue that the allocation of labor resulting from unions is both inefficient and inequitable. d. All of the above are correct.
Which of the following is an example of an automatic stabilizer?
A. Supply-side policies that Congress designs to stimulate the economy. B. Fed discount rate. C. Changes that are triggered by the economy and not by government decision makers. D. Discretionary fiscal policy that must be determined by Congress and the president.