An increase in the interest rate is an increase in the opportunity cost of consuming in the future.
Answer the following statement true (T) or false (F)
False
Rationale: No, it is an increase in the opportunity cost of current consumption --- because you now give up more in future consumption for every dollar you consume now.
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Minimum efficient scale varies by industry.
Answer the following statement true (T) or false (F)
The phrase "decreasing marginal benefit" means that
A) the more you consume of the product, the less total benefit you derive. B) the marginal cost will be increasing as you consume more of a good. C) each additional unit of a good you consume gives you less additional benefit than the previous unit. D) Both answers A and B are correct. E) Both answers A and C are correct.
Suppose that a price-taking firm charges $12 for its product and has a cost function given by C(Q) = 2Q + (Q2/60). The corresponding marginal cost is given by MC(Q) = 2 + (Q/30). How much output should the firm produce? What if the firm has $2,000 of avoidable fixed costs?
What will be an ideal response?
Which of the following can be categorized as derived demand?
a. A decline in the demand for building products following a drop in housing demand. b. An increase in demand for gasoline following a fall in the price of petroleum products. c. An increase in the demand for woolens in winter. d. A decline in the demand for labor on account of outrageous demands of trade unions.