In Figure 5.1, the difference between total costs and variable cost is:
A. average total cost.
B. fixed cost.
C. total costs are positive when output is zero implying fixed costs.
D. All of these.
Answer: B
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When the Fed extends a $100 discount loan to the First National Bank, reserves in the banking system
A) increase by $100. B) increase by more than $100. C) decrease by $100. D) decrease by more than $100.
Firms are able to expand their operations by acquiring funds from households. They can do this directly through financial markets such as ________, or indirectly through financial intermediaries such as ________
A) stock markets; bond markets B) stock markets; banks C) banks; bond markets D) bond markets; stock markets
The cost of an action is measured in terms of foregone opportunities
a. True b. False Indicate whether the statement is true or false
The firm will shut down in the short run if
A. the price falls below its minimum AVC. B. P = MC. C. the market price rises unexpectedly. D. P = ATC at its minimum.