Answer the following statement(s) true (T) or false (F)
1. The marginal cost of producing tea can be measured in dollars per pound of tea.
2. A firm's revenue can be calculated from its demand curve using the formula "price times quantity."
3. Fixed costs have no effect on a firm's profit.
4. Profits will be positive as long as marginal revenue is greater than marginal cost.
5. If marginal cost exceeds marginal revenue, then a reduction in output will create higher profits.
1. True
2, True
3. False
4. False
5. True
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Which of the following statements is false?
A) The difference between average total cost and average fixed cost is average variable cost. B) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. C) Firms often refer to the process of lowering average fixed cost as "spreading the overhead." D) When marginal cost equals average total cost, average total cost is at its highest value.
The labor demand curve:
A. is provided by firms who want to hire workers at each given wage. B. is made up of workers who want to work for firms at each given wage. C. shows number of workers who are willing and able to work at higher wages. D. shows that the number of people who want to work increases as the wage increases.
The purchase of a new automobile is included in
A) consumption expenditures on services. B) consumption expenditures on nondurable goods. C) consumption expenditures on durable goods. D) investment expenditures.
Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies. If she now bakes 10 cakes and 20 pies, what is the opportunity cost of baking an additional 15 cakes?
A) 5 pies B) 10 pies C) 15 pies D) 20 pies