Which type of cost is does not change as the quantity of output produced changes?
A) total cost
B) average cost
C) fixed cost
D) marginal cost
C
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All points above the budget line are
A) inferior to every point on the budget line. B) preferred to every point on the budget line. C) unaffordable. D) Both answers B and C are correct.
The price elasticity of supply is 0.6. This means that
A) a $10 increase in price would increase quantity supplied by 60. B) a 150 percent increase in price would increase quantity supplied by 90 percent. C) a 50 percent increase in quantity will occur when price increases by 30 percent. D) a 10 percent increase in quantity will occur when price increases by 6 percent.
Paul and Diane are two fishing fanatics who also supply local restaurants with fresh brook salmon. Paul uses a $20 rod and reel and catches 20 fish in one day. Diane places a $100 net all the way across the stream and at the end of the day she has caught 5,000 fish. Diane's ingenuity is an example of
a. constant returns to scale in fish production b. increasing marginal cost c. the difference between short- and long-run costs d. the existence of economies of scale in fishing technology e. unfair trade practices
When Acme Dynamite produces 250 units of output, its variable cost is $2,000, and its fixed cost is $500. It sells each unit of output for $25. When Acme Dynamite produces 250 units of output, its profit is:
A. $6,250 B. $3,750 C. $4,250 D. $5,750