In economics, a fixed cost is a cost that
A) is present only in the short run.
B) goes up as the level of output goes up.
C) goes down as the level of output goes up.
D) does not vary with the level of output.
Answer: D
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The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the average variable cost of producing 1,000 frijoles?
A) $1 B) $2 C) $3 D) More information is needed to determine the answer.
Everything else held constant, an increase in autonomous consumer spending will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
Which of the following is an appropriate fiscal policy prescription for the government to follow?
A. Deficit reduction during a recession. B. Deficit reduction during a war. C. Deficit reduction when there is excess AD. D. Deficit expansion in an inflationary gap.
Economic theory suggests that the standard of living of American workers would rise if
a. workers were forced to retire earlier. b. automation were outlawed. c. technological improvements increased output per worker-hour. d. the minimum wage were doubled.