As quantity increases, which of the following must be true if average total costs are rising?
a. Marginal cost must be greater than average total cost
b. Marginal cost must be less than average total cost.
c. Average fixed cost must be increasing.
d. Average fixed cost must be less than average variable cost.
a
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The components of consumption expenditures include all of the following except
A) nondurable goods consumption. B) durable goods consumption. C) government consumption. D) services.
In the short run, a monopolist will shut down when
a. average total cost is greater than price at all output levels b. average variable cost is greater than average fixed cost at all output levels c. price is greater than average variable cost at all output levels d. average fixed cost is greater than price at all output levels e. average variable cost is greater than price at all output levels
An economist who claims that an increase in government spending would result mainly in a higher price level believes the economy is operating where
a. the MPC is small. b. the MPC is large. c. aggregate supply curve is flat. d. aggregate supply curve is steep.
Suppose that a consumer purchases just two goods, X and Y. The slope of the budget line would indicate the:
A. Opportunity cost of good Y in terms of good X given up for each unit of Y B. Opportunity cost of good X in terms of good Y given up for each unit of Y C. Maximum quantity of good Y that the consumer could buy with a given budget D. Maximum quantity of good X that the consumer could buy with a given budget