Assume that in the short run a firm is producing 100 units of output, has average total costs of $100, and average fixed costs of $20. The firm's total variable cost at this output level is
A. $12,000.
B. $120.
C. $8,000.
D. $80.
Answer: C
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Suppose that there is no government and no international trade. When C + I is less than the level of real GDP
A) unplanned inventories increase, and real GDP contracts. B) unplanned inventories decrease, and real GDP expands. C) real planned investment spending equals real planned saving. D) unplanned inventories equal zero, and there is no change in the level of real GDP.
Refer to Figure 11.5. An increase in the level of investment is best illustrated by diagram
A) A. B) B. C) C. D) D.
If this is an open economy, the price of a car will be ________.
A. $8,000/car B. $10,000/car C. $14,000/car D. $6,000/car
People hold money as opposed to financial assets because money
A) earns interest. B) is perfectly liquid. C) earns no interest. D) earns a higher return than other financial assets.