Which of the following observations is true?
A. In the long run, more costs become variable.
B. Fixed costs cannot be completely varied if the time period is sufficiently long.
C. Fixed costs arise when some types of inputs can be bought only in big batches.
D. Variable costs arise when inputs have a large productive capacity.
Answer: A
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When the markets of an economy are more competitive, economic growth
a. is harmed by the resulting low rates of profit for industry. b. is enhanced because producers have a stronger incentive to provide goods efficiently. c. will be slower because prices do not rise as rapidly. d. is unaffected.
The air force just hired a defense contractor to produce one hundred fighter jets. This action answered which basic economic question?
a. What is the best method of production? b. How will the goods and services be produced? c. Who will get the goods and services? d. What goods and services will be produced?
A minimum wage set at the competitive market wage level affects the monopsonist by
A) altering its marginal expenditure curve and raising its employment level. B) reducing its output. C) altering the market supply curve. D) altering its marginal expenditure curve and lowering its employment level.
Initially trade between the United States and Canada is balanced. Then, if a change in the exchange rate reduces the U.S. dollar price of Canadian goods, ceteris paribus, we would expect
A. a trade deficit in Canada. B. a trade surplus in the United States. C. a trade surplus in Canada. D. a trade deficit in both countries.