A rising average cost implies that
a. marginal cost is equal to average cost
b. marginal cost is above average cost
c. marginal cost is below average cost
d. none of the above
b
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The introduction of money to an economy results in:
A) higher incomes B) higher productivity C) increased specialization D) a more efficient barter system
Moral hazard is not eliminated in debt financing because
A) borrowers have an incentive to assume greater risk than is in the interest of the lender. B) firms with a great deal of debt often go bankrupt. C) principal-agent problems are greater with debt financing than with equity financing. D) the use of restrictive covenants tends to increase moral hazard.
Estimates of the size of the underground economy in the U.S. range from: a. 4 to 20 percent
b. 2 to 5 percent. c. 7 to 10 percent. d. 45 to 60 percent.
Assume the apple market is competitive. If citizens want wages and the number of available jobs for apple pickers to increase, the best strategy would be to
A. Boycott apples until wages increased. B. Insist that the government establish a minimum wage for apple pickers. C. Insist that the sellers raise the price of apples. D. Buy more apples.