The table above gives the cost of producing T-shirts. When 5 T-shirts are produced, the average fixed cost is ________ and the average variable cost is ________
A) $4; $10
B) $10; $6
C) $5; $3
D) $4; $6
D
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Which of the following gives rise to a pecuniary externality?
A) Excessive consumption of alcohol leading to ill health B) Sudden increase in the demand for diamonds leading to an increase in their price C) Deforestation leading to the extinction of many species D) Globalization leading to the displacement of indigenous workers
An increase the expected future price of a good
A) increases its demand. B) decreases its demand. C) increases its supply. D) has no effect on either its demand or its supply.
Which of the below statements is true?
a. It is efficient to produce beyond the equilibrium output level as long as costs are low. b. The level of output that maximizes the value of an economy's output is found at the intersection of supply and demand in a competitive market. c. Production and exchange is beneficial as long as the demand curve lies below the supply curve. d. Mutually beneficial exchange is mostly harmful unless regulated.
Which of the following is NOT a likely market solution to the lemons problem?
A) average cost pricing B) product warranty C) industry standard D) product certification