Assume that we only have data on total cost when output is equal to zero and no other cost information at our disposal. How could we possibly know what the fixed costs are for the firm?
What will be an ideal response?
If we know what the total costs are at an output level of zero we don't need any more information to figure out the fixed costs. In this case the fixed costs would equal to the total costs since at an output level of zero there wouldn't be any variable costs. Since total costs is the sum of the fixed and variable costs this is what allows us to say that total costs equal the fixed costs of the firm.
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The justification for occupational licensing laws is that they protect the public from incompetent practitioners (for example, lawyers and medical doctors), but the laws also result in
A) ownership of a key input. B) higher prices and restrictions on the number of people who can enter the professions affected by the laws. C) an increase in the amount of output required to achieve minimum efficient scale. D) economies of scale.
In the monetary small open-economy model with a flexible exchange rate, an increase in the exchange rate has which impact on domestic money demand?
A) It increases it. B) It decreases it. C) It has no impact. D) It depends.
As Javier hit a baseball with his bat, the bat cracked. This example shows ______.
a. composition, but not causation b. causation, but not correlation c. correlation and composition d. correlation and causation
Assume sticky prices and given expectations of future exchange rates, what is the immediate effect on the exchange rate of the U.S. dollar if there is a temporary increase in the quantity of U.S. dollars?
a. U.S. nominal and real returns rates decline while euro rates hold steady, and the U.S. dollar depreciates against the euro. b. U.S. nominal returns rise, U.S. real returns fall, euro rates rise, and the U.S. dollar appreciates against the euro. c. U.S. nominal returns fall, U.S. real returns rise, euro rates fall, and the U.S. dollar appreciates against the euro. d. U.S. dollar returns and euro returns both rise, leaving the exchange rate unchanged.