An increase in the wage rate ______
A. shifts the average total cost curve and the marginal cost curve upward
B. shifts the average fixed cost and average variable cost curve upward
C. increases average variable cost but does not change marginal cost
D. does not change average variable cost but increases average total cost
A Wages are a variable cost, so an increase in the wage rate in-creases the average total cost and the marginal cost.
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A transfer payment is
a. a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. b. a payment that is automatically transferred from your bank account to pay a bill or some other obligation. c. a form of government spending that is not made in exchange for a currently produced good or service. d. the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.
QN=78 (17806) The CPI is more commonly used as a gauge of inflation than the GDP deflator is because
a. the CPI is easier to measure. b. the CPI is calculated more often than the GDP deflator is. c. the CPI better reflects the goods and services bought by consumers. d. the GDP deflator cannot be used to gauge inflation.
The components of GDP are:
a. Consumption, government spending, net exports, and investment. b. Consumption, exports, imports, and disposable income. c. Exports, imports, investment, and disposable income. d. Consumption, inventory, government spending, and disposable income.
Refer to Scenario 9.5 below to answer the question(s) that follow. SCENARIO 9.5: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 percent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $3 on average per meal. Refer to Scenario 9.5. In the long run, the restaurant will want to
A. operate and expand. B. go out of business. C. shut down but not go out of business. D. operate but not expand.