The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000.
What is AVC at its minimum?
A. $100
B. $80
C. $50
D. $8
E. $35
Answer: E
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If the price of a DVD falls,
i. the demand curve for DVDs will shift rightward. ii. the demand curve for DVDs will not shift. iii. there will be a movement along the demand curve for DVDs. A) ii and iii B) iii only C) i only D) ii only E) i and iii
Imposing a tax on sales of a product
A. shifts both the market supply and demand curve for the product. B. has no effect on either the market demand or the market supply curve for the product. C. shifts the market supply curve for the product. D. shifts the market demand curve for the product.
As existing firms exit a decreasing-cost industry
A. the position of the LRAC curve doesn't change, but firms move up their LRAC curve. B. the position of the LRAC curve doesn't change, but firms move down their LRAC curve. C. the LRAC curve shifts up. D. the LRAC curve shifts down.
Which of the following relationships is CORRECT?
A) Net Investment = Gross Investment + Depreciation B) Consumption expenditure = Net Investment - Depreciation C) Gross Investment = Net Investment + Depreciation D) Depreciation = Gross Investment - Consumption expenditure