The vertical distance between the total variable cost and total cost curves
A. is everywhere equal to total fixed cost.
B. increases at a decreasing rate.
C. is everywhere equal to zero.
D. is everywhere equal to marginal cost.
Answer: A
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"A doubling of the price of gasoline in the 1970s did not reduce consumption one iota." The person making the above claim evidently thinks the demand for gasoline is
A) completely elastic. B) completely inelastic. C) greater than the supply. D) less than the supply. E) unit elastic.
A durable good is product that
A) holds up well under abuse. B) has had the same design over a long period of time. C) is purchased only once. D) is usable over a long period of time.
A necessary condition for market power to exist for a particular company in a market is that
A. information must be understood by both buyers and sellers. B. consumers perceive all products as homogeneous. C. effective barriers to entry must exist. D. the number of firms should be over 150.
During 2008-2013, the Fed initiated several rounds of "quantitative easing.". Under this policy, the Fed
a. increased its purchases of financial assets and thereby injected additional reserves into the banking system. b. increased its purchases of financial assets, which reduced the reserves available to the banking system. c. reduced its purchases of financial assets and thereby injected additional reserves into the banking system. d. reduced its purchases of financial assets and thereby reduced the quantity of reserves available to the banking system.