Suppose that the only input used in the generation of solar energy is sunlight and has a zero cost. The average total cost of producing electricity is:
A. zero.
B. equal to the marginal cost.
C. equal to the average fixed cost.
D. immeasurably high.
Answer: C
You might also like to view...
If you buy a call option on Treasury futures at 110, and at expiration the market price is 115, the ________ will ________ exercised
A) call; be B) put; be C) call; not be D) put; not be
Insurance companies:
A. profit from the difference between the premiums paid and the expected value of clients' payouts. B. only profit by selling to risk neutral clients. C. must charge less than the expected value of payout, otherwise they would go out of business. D. All of these statements are true.
Which of the following is the best example of a supply-side market failure?
A) No one provides street lights in a town because, once the lights are in operation, people don't have to pay to use them. B) Street performers don't get full payment for the value of their output because people watch and enjoy the shows without paying the artist. C) Government imposes taxes on the production of a socially desirable good. D) A firm keeps its production costs down by dumping its waste in the nearby river, adversely affecting water quality for residents in the area.
Which of the following actions would help the Fed increase the supply of money in the economy?
a. buying government bonds b. raising the reserve ratio c. selling government bonds d. raising the discount rate