When average total cost rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale
a. True
b. False
Indicate whether the statement is true or false
True
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your total cost (in dollars) is given by the equation TC = 300 + 10Q, where Q represents the number of t-shirts you make. As you increase your production of t-shirts, your average fixed cost ________ and your marginal cost ________.
A. decreases; increases B. increases; decreases C. stays the same; increases D. decreases; stays the same
Labor unions made their largest membership gains in
A. 1900-1915. B. 1915-1930. C. 1935-1950. D. 1965-1980.
What policy tool of the Federal Reserve relies on bank borrowing to be effective?
A. Check collection B. The reserve requirement C. The discount rate D. Open-market operations