A decrease in demand for a good will lead to a decrease in the price of the good, but an increase in the quantity supplied.
a. true
b. false
Answer: b. false
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Average total cost minus average variable cost ________ as output increases because ________ as output increases
A) decreases and then increases; marginal cost initially decreases and then increases B) decreases; average fixed cost decreases C) decreases; marginal returns diminish D) decreases; economies of scale are present
At every output level, a firm's short-run average cost (SAC) equals or exceeds its long-run average cost (LAC) because
A) diminishing returns apply in the short run. B) returns to scale only exist in the long run. C) opportunity costs are taken into account in the short run. D) there are at least as many possibilities for substitution between factors of production in the long run as in the short run. E) none of the above
Which U.S. President was in office for most of World War II?
a. Herbert Hoover b. Abraham Lincoln c. Franklin D. Roosevelt d. Lyndon Johnson e. Dwight Eisenhower
A firm has $200,000 to spend on either direct sales or advertising. Suppose further that if the $200,000 is spent on direct sales, it will bring in an accounting profit of $40,000 . Instead, the (accounting) profit it could obtain from a $200,000 investment in advertising is $X. Compare the profitability of the two options if (a) X = 50,000 . (b) X = 30,000 . or (c) X = 40,000