Economists spend much of their time
A) describing how choices are made and analyzing the results of those choices.
B) arguing that optimal decisions are rarely made at the margin.
C) using normative analysis to develop economic models.
D) telling businesses what goods and services to produce and how to produce them.
Answer: A
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A) 3/4. B) 1. C) 4/3. D) 3.
The Toys-R-Danger-Us Toy Company can produce 500 water pistols for a total cost of $1,400 . The company can also produce 1,000 water pistols for a total cost of $3,000 . but it would have costs of $200 even if it produced no water pistols. Which of the following is true?
a. Total cost is increasing at a decreasing rate. b. Total cost is increasing at a constant rate. c. Marginal cost is positive and increasing as output increases. d. Variable cost is positive and decreasing as output increases. e. Fixed cost is positive and decreasing as output increases.