As output increases, average fixed cost gets smaller and smaller
Indicate whether the statement is true or false
TRUE
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Suppose a plaintiff hires a lawyer to represent her in a court case. To which of the following contracts would a highly risk-averse plaintiff agree?
A) The lawyer is paid by the hour. B) The lawyer receives a share of the settlement. C) The lawyer receives a fixed fee. D) The lawyer pays the client a fee for the right to the entire settlement.
In the short run, a monopolist will always shut down when
a. total cost is greater than total revenue at all output levels b. total variable cost is greater than fixed cost c. total revenue is greater than total variable cost at all output levels d. fixed cost is greater than total revenue at all output levels e. total variable cost is greater than total revenue at all output levels
A tax cut designed to encourage investment and stimulate economic growth
a. must be matched by a cut in government spending in order to be effective b. must be matched with tax increases in other areas, or with a cut in government spending, if crowding out is to be avoided c. will only work if it decreases the size of the budget deficit d. can only be effective if the tax burden is redistributed or government spending is cut e. will only work if it is a cut in the capital gains tax
For a macroeconomist, the case for aggregation is based on two principles?1) the composition of demand and supply may not matter for some purposes, and 2)
a. during fluctuations markets normally move together. b. individual markets allocate resources efficiently. c. inflation, unemployment, and growth never go together. d. individual markets distribute income efficiently.