Refer to the accompanying figure. At quantities less than 50 doughnuts per day:
A. average cost is declining because marginal cost is increasing.
B. average cost is declining because marginal cost is less than average cost.
C. marginal cost is declining.
D. the return to the firm's variable factors of production must be increasing.
Answer: B
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Make use of the quantity equation to answer the following problem. If the Fed increases the money supply by 4%, velocity increases by 1%, and economic growth is 3%, by how much will the price level increase?
What will be an ideal response?
Industrial market countries are also referred to as
a. developing countries b. low-income economies c. middle-income economies d. transitional economies e. high-income economies
Socialism is correctly described by which of the following statements?
a. Central planning is used exclusively to answer the basic economic questions. b. Markets are used exclusively to answer the basic economic questions. c. Tradition is used exclusively to answer the basic economic questions. d. Government ownership of many resources and centralized decision-making answers the basic economic questions.
On average each year, about 7 percent of all firms in the United States are new and 1 percent go out of business. According to the text, luck may play a role. Which of the following reasons for failure might be attributable to luck?
A) An individual undertakes a very risky venture so that his product is first to market. B) An executive fails to undertake an investment that would have yielded great success. C) An executive focuses on the incorrect objective. D) An executive undertakes an investment just prior to a major natural catastrophe that destroys the firm's assets. E) An executive fails to perceive what customers really want.