Say at the current output level marginal costs = $20 and the average total cost = $10. From this information we know that the
A. average total costs are increasing.
B. average total costs are decreasing.
C. marginal costs are decreasing.
D. marginal costs are increasing.
Answer: A
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Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much does Kate produce in the Nash equilibrium?
A. 2,000 B. 1,333.33 C. 800 D. 4,000
In the short run, we assume that the number of firms in a perfectly competitive market:
A. varies if perfect information is present. B. varies more than the long-run equilibrium. C. is fixed. D. is equal to the number of firms in the long-run.
If the economy spends 80 percent of any increase in real GDP, then an increase in investment of $1 billion would result ultimately in an increase in real GDP of:
A. $0. B. $0.8 billion. C. $1.0 billion. D. $5.0 billion.
An economy operating on its production possibilities frontier is:
a. wasting resources. b. efficient. c. inefficient.