Total cost of production is the sum of total variable cost and total fixed cost. If the total fixed cost alone increases:
A. the average total cost curve shifts downward at all output levels.
B. the marginal cost curve shifts upward at all output levels.
C. the vertical distance between the average total cost curve and average variable cost curve increases at all output levels.
D. the average variable cost curve shifts upward at all output levels.
Answer: C
You might also like to view...
What is the best definition of “inflationary bias” in this context?
Read the following passage and then answer the question that follows. Since 1995, the Bureau of Labor Statistics (BLS) has been eliminating or reducing biases in the Consumer Price Index (CPI). Many economists believe that the BLS improvements have cut inflationary bias in half, and it is now estimated to be less than 1 percentage point per year. a. the tendency to believe that inflation is beneficial to the economy b. the tendency to promote policies that cause a positive inflation rate c. the tendency to overstate the rate of inflation d. the tendency of the members of an economy to push prices up
The stock market crashed in the year __________.
Fill in the blank(s) with the appropriate word(s).
If we move to the right along the upward-sloping labor supply curve, we observe that the cost of labor
A. Decreases due to the increasing opportunity cost. B. Decreases due to the decreasing opportunity cost. C. Increases due to the increasing opportunity cost. D. Increases due to the decreasing opportunity cost.
The AD curve will shift when there is a change in:
A. the inflation rate or the money growth rate. B. the money growth rate or the velocity growth rate. C. the real growth rate or the inflation rate. D. the velocity growth rate or the real growth rate.