In the short run, when output is zero
A. total cost is zero.
B. total cost is equal to variable cost.
C. total cost is equal to fixed cost.
D. it is impossible to determine total cost.
C. total cost is equal to fixed cost.
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The largest single portion of state and local budgets is devoted to
A. state and local defense. B. health and public welfare programs. C. state and local unemployment compensation. D. education. E. interest payments on state and local debt.
In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to
________, everything else held constant. A) up; rise B) up; fall C) down; rise D) down; fall
Smaller firms tend to rely on financial intermediaries instead of financial markets for external financing due to
A) transactions costs. B) adverse selection. C) moral hazard. D) all of the above.
The figure above represents the relationship between output and cost in an industry with an external cost. Which line represents the marginal private cost (MC) curve?
A) Curve 1 B) Curve 2 C) the dotted line BC D) the y-axis E) the dotted line AB