If the marginal cost curve is above the average variable cost curve, then
A. average variable cost is decreasing.
B. marginal cost is decreasing.
C. average variable cost is increasing.
D. average variable cost is constant.
Answer: C
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According to the circular flow, the value of total output produced and total income
A) will be equal. B) should increase by the unanticipated rate of inflation. C) should differ by the value of intermediate goods. D) will always be increasing in a capitalist economy.
Which of the following will cause an increase in the marginal product of capital (MPK)?
A) a decrease in the quantity of labor in use B) an increase in labor productivity C) a decrease in the quantity of capital in use D) all of the above E) none of the above
The consumption function is the relation between consumption and production
Indicate whether the statement is true or false
Which of the following statements regarding economic regulation is TRUE?
A) Economic regulation has failed by insisting that firms must be allowed to earn a normal rate of return. B) Rate-of-return regulation has been much more effective than cost-of-service regulation. C) Economic regulation deals only with rates of return, and not with prices. D) Economic regulation deals mainly with prices firms charge, but firms can alter their return by altering quality of service, effectively raising the price per constant-quality-unit.