When average variable cost is falling ______.
a. the average total cost curve must be moving upward
b. the point of diminishing marginal product has set in
c. marginal cost must be less than the average variable cost
d. the average fixed cost curve crosses it at its lowest point
c. marginal cost must be less than the average variable cost
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If one firm sets the market price
a. the market is perfectly competitive b. the market is not perfectly competitive c. there are a large number of buyers who can buy from a wide range of competitors d. there is free entry into the market e. its product must be a standardized commodity, produced by many competitors
Dana, a recent graduate with a degree in economics, turned down a job offer paying $50,000 a year and instead chose to become an entrepreneur. He borrowed $15,000 from a bank at a 10 percent interest rate and that was sufficient to pay for all his equipment, materials, and labor. Dana's accountant told him that the business generated a total revenue of $70,000 in the first year. How much of a
return on his entrepreneurial ability did Dana earn? a. $7,000 b. $20,000 c. $18,500 d. $50,000 e. $70,000
Part of the administrative burden of a tax is
a. the money people pay to the government in taxes. b. reducing the size of the market because of the tax. c. the hassle of filling out tax forms that is imposed on taxpayers who comply with the tax. d. the cost of administering programs that use tax revenue.
In the short run, ________ determines output, and in the long run ________ determines output.
A. potential output; prices B. total spending; prices C. potential output; total spending D. total spending; potential output