Average Fixed Costs (AFC) is equal to A. Average Total Cost (ATC) - Average Variable Cost (AVC). B. [Total Costs (TC) - Total Variable Costs (TVC)] / Quantity (Q). C. Total Fixed Costs (TFC) / Quantity (Q). D. all of the above. E. none of the above.
Q: Consider the AD/AS model. An increase in government purchases will change equilibrium real GDP but…
A: An increase in the government expenditure result in the demand for the goods and services to…
Q: 5. Automatic adjustments to the government budget The following table provides some information on…
A: Budget Deficit = Government expenditure - Tax Revenue
Q: Consider a Duopoly model, in which two firms decide a quantity simultaneously. The market demand is…
A: Cournot equilibrium is a concept in economics that describes a situation in which two or more firms…
Q: The table represents the demand for and supply of ice cream. Price per unit (P) 150 120 90 60…
A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium…
Q: In January 2017, a report from the National Retail Federation said that “Holiday retail sales during…
A: Consumption behavior refers to the actions and decisions that individuals and households make…
Q: The following is information for the economy of Tandor, where taxes are wholly autonomous: C = 48…
A: The level of income can be calculated through the expenditure method by taking the consumption,…
Q: In 4-6 sentences, discuss how understanding the concept of price elasticity of demand is useful for…
A: Price elasticity of demand is a economic tool that helps us relate the change in price to change in…
Q: in a real life, consumers do not sometimes satisfy their budget constraint
A: A person's budget constraint is the utmost amount they may spend on various goods and services given…
Q: If the costs of producing tomatoes increase, predict the impact on tomato prices, using the supply…
A: The amount of an item or service that suppliers are prepared and ready to sell to customers at…
Q: 5) Refer to the graph above to answer this question. What is the value of the MPC? A) 0.25. B)…
A: MPC refers to the marginal propensity to consume. The marginal propensity to consume means change in…
Q: Tricky question. Consider the diagram below, depicting the United States Market for Airplanes…
A: Since you have posted multiple questions, we will provide the solution only to the first five…
Q: If foreigners investing in the United States (.e. Di) exceeds U.S. investors investing abroad (.e.…
A: Relative Price of USA Exports = (Nominal Exchange Rate x Foreign Price Index) / Domestic Price Index…
Q: uppose the nation of Isoland is an importer of textiles and is looking for a way to raise government…
A: As we know, with a consumption tax equivalent to a tariff the demand curve will shift downwards by…
Q: In the IT company, there was hired a UNIX server administrator with a basic salary and with an…
A: Continuous money inflation refers to a situation where the general price level of goods and services…
Q: An individual is consuming two goods, good x and good y. His utility function is given as Perfect…
A: Equivalent Variation: When the price of a good changes and hence the consumption bundle, that new…
Q: 10; P2 change. = Cobb-Douglas: u(x₁, x₂) = x1.5x2.5; mo = 200; p₁ = 20; p₁ = 8. Solve for the CV and…
A: Compensating Variation (CV) is a measure of the change in a consumer's welfare due to a change in…
Q: True/ false . The purchasing power and inflation have an inverse relationship.
A: The ability of a person, company, or government to spend a certain amount of money on products and…
Q: Consider a Duopoly model, in which two firms decide a quantity simultaneously. The market demand is…
A: Equilibrium is where the demand curve intersects the supply curve. Profit is maximized where the…
Q: If the marginal propensity to consume increases, that will: Shift the consumption function…
A: The general form of consumption function C=C0+bY Here C0 = autonomous consumption b= marginal…
Q: 10 Which of the following two things would decrease the money supply? a) The Fed sells bonds or…
A: The entire quantity of money that is in circulation in an economy at any particular moment is…
Q: Problem 6.a: A manufacturing firm is considering the mutually exclusive alternatives given in the…
A: Incremental Internal Rate of Return Internal ROR is generally used in capital budgeting to evaluate…
Q: Suppose the market for ensaimada is described by the following equations. Qd = 1000 -50P Qs =…
A: Since we know that unemployment rate is defined as the total number of unemployed people as the…
Q: If the costs of producing tomatoes increase, what is the likely impact on the supply and demand…
A: The quantity of an item or service that suppliers are willing and able to offer for sale at various…
Q: A firm is said to operate with constant returns to scale if its production cost increases by four…
A: Return to scale refers to the change in the total output when the all factors are changed. Returns…
Q: In Figure 2 above, what are the factors that may cause the aggregate demand to shift from AD to AD1?…
A: Aggregate Demand implies the amount of sales proceeds that an entrepreneur actually expects from the…
Q: image 2 3) If the decrease in demand is relatively larger than the increase in supply for baklawa,…
A: The equilibrium price is determined where the demand and supply are equal. The equilibrium price and…
Q: Given a simple Keynesian spending multiplier of 2, how will GDP (Y) change when business investment…
A: The Keynesian spending multiplier states that economic development is promoted with an increase in…
Q: Whenever the Total revenue is $31 and the explicit costs is $20 find the Accounting profit.
A: As per the question, Total revenue = $31 Explicit cost is written to be as = $20
Q: Using supply and demand, predict the impact on car prices if consumers income decrease. Group of…
A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium…
Q: 4. The public debt - Ownership The following table contains approximate figures for gross domestic…
A: The national debt is the aggregate of money that is owned by a government. It is equivalent to the…
Q: Figure 3-13 Peru's Production Possibilities Frontier traties 400 360 320 + 200 240 200+ 160+ 120 00+…
A: Opportunity cost refers to the cost of something that must be given up to get something.…
Q: For the Utility function and demand functions: U(x, y) = x0.5 + y0.5 I x(px,Py, 1) y (Px, Py, 1) = =…
A: Price elasticity of demand: It measures the percentage change in the quantity demanded for a 1%…
Q: Do economists have a role in policymaking on non-economic topics?
A: Economists are professionals who study how individuals, organizations, and societies make choices…
Q: Let F (L, K): = 1, PK = Max {L, 2K} be a firm's production function. Let P₁ = 6, and the total…
A: production function Q=F(L,K)=Max(L,2K) Price of labor(L)=PL=1 and price of capital (K)=PK=6 budget…
Q: Using the supply and demand framework, predict the impact on the equilibrium quantity of cars if…
A: Consumer income is one of the determinants of the demand curve. When consumer income decrease then…
Q: A farmer uses a certain technology that produces electricity. His production function is given as: q…
A: Production function shows the relationship between the input used and the output produced. The…
Q: Suppose that a country is at its golden-rule steady state. After an election, the newly elected…
A: A country is at its golden-rule steady state when its per output is not changing. To reach the…
Q: Using the figures below, construct a complete picture of the vicious circles of economic and…
A: The vicious cycle of poverty is a self-perpetuating circle of poverty from which it is almost…
Q: 17 The graph below depicts an economy where a decline in aggregate demand has caused a recession.…
A: Given information: Initial long-run equilibrium occurs at the intersection point of LRAS, AS, and…
Q: 1. If domestic saving exceeds domestic investment, one would observe: (a) positive net capital…
A: A trade deficit represents a situation where a country's import exceeds its exports.
Q: The figure shows graphs of the total cost function and the total revenue function for a commodity.…
A: The primary goal of a firm in producing a product is to maximize revenues. Yet, the costs of…
Q: You estimated the following regression. What value would you predict for Y, if X = 81? (Round your…
A: A regression line is a straight line that represents the relationship between two variables in a…
Q: (6) Which of the following statements best describes firm's cost-minimizing behaviors? a) A firm's…
A: In economics, the concept of cost minimization is based on the concept that firms aim to provide a…
Q: Suppose that a country is at its golden-rule steady state. After an election, the newly elected…
A: In Solow's (1956) model, the golden-rule steady state is achieved when the saving fee is at the…
Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…
A: In monopoly there exists only one firm producing unique good. In perfectly competitive market there…
Q: For the next 15 years, you will deposit $1,500 every month in a savings account. The account pays 6%…
A: An ordinary annuity is a series of equal payments made at the end of each period, such as the end of…
Q: (Q3) Movement along the AD curve Consider the following AD curve of an economy. P B AD yd Determine…
A: AD is the aggregate demand curve. The relation between the total demand for goods and services in…
Q: If demand shifts right AND supply shifts right, what happens to the equilibrium price and…
A: Demand is the quantity of a good or service that customers are willing and able to purchase at a…
Q: Housing bubble: In the early 2000s, there was a housing bubble in the United States. Banks were…
A: Market demand for a commodity can change as a result of a change in consumers income, their tastes…
Q: Using the following table, for each price level, calculate the optimal quantity of units for the…
A: A competitive market is the market where consumer and producer has no power to influence the market…
Average Fixed Costs (AFC) is equal to
Step by step
Solved in 2 steps
- Where Q = quantity, TC = total cost, TFC = total fixed cost, and TVC = total variable cost; average variable cost, or “AVC” is equal to: A) TFC/Q B) Q/TFC C) Q/TVC D) TVC/QIn the short run, average total costs at first decrease and then increase as more output is produced because: (A)marginal cost is at first greater than average total costs, then falls below it. (B)average fixed costs continually decrease. (C)average variable costs at first decrease and then increase at the same level of output. (D)total cost continually increases. (E)marginal cost is at first less than average total costs, then rises above it.A producer borrows money and starts a business. He himself looks after the business. Identify implicit and explicit costs from this information. Explain. List and explain which of the following is a fixed cost or a variable cost for Caribbean Airlines. The cost of fuel used in its planes. The rent on its Piarco headquarters. The lease payments on its current inventory of jets. The cost of peanuts it serves to passengers. The salary paid to the Chief Executive Officer. How is the difference between average total cost and average variable cost impacted by an increase in output?
- In the ice cream industry, in the short run, what cost includes the cost of cream and sugar, but not the cost of the factory. Choose all answers that are correct. a.Marginal cost b.Variable cost c.Fixed cost d.Average total costWhich of the following is correct? a) Total Fixed Cost = Total Cost + Total Variable Cost b) Total Cost = Total Variable Cost + Marginal Cost c) Average Fixed Cost = Average Total Cost – Average Variable Cost d) Average Total Cost = Marginal Cost + Average Fixed CostCosts in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost each month for various levels of production if it uses one, two, or three factories. (Note: QQ equals the total quantity of bikes produced by all factories.) Number of Factories Average Total Cost (Dollars per bike) QQ = 100 QQ = 200 QQ = 300 QQ = 400 QQ = 500 QQ = 600 1 440 320 240 320 480 720 2 580 400 240 240 400 580 3 720 480 320 240 320 440 Suppose Ike’s Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost is Blank per bike. Suppose Ike’s Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikes usingthree…
- In Figure 7-3, curve I is the a. total-fixed-cost curve. b. average-variable-cost curve. c. total-cost curve. d. total-variable-cost curve. e. average-total-cost curve.Short-run average total cost shows the minimum average total cost for each level of output that can be produced has a minimum point at the firm's minimum cost for that relevant range of production might have a upward-sloping segment that indicates dis-economies of scale might have a flat portion that indicates a constant average cost over that range of output. might have a downward-sloping segment that indicates economies of scaleWhich of the following is an implicit cost to a firm that produces a good or service? A. Labor costsB. Costs of operating production machineryC. Foregone profits of producing a different good or serviceD. Costs of renting or buying land for a production site
- Classify the following milk bar short-run costs as fixed cost or variable cost Milk truck Fruit freezer Cost of milk sold each day ii) Assuming the following are the costs of your milk bar after the end of the second week answer the question below based on the following information. Fixed cost increased from 100 to 150 Variable cost increases from 220 to 300 Milk output increases from 450 to 620 a) What is the average total cost during the second week. Show your work b) What is the marginal cost. Show your workA producer borrows money and starts a business. He himself looks after the business. Identify implicit and explicit costs from this information. Explain. List and explain which of the following is a fixed cost or a variable cost for Caribbean Airlines. The cost of fuel used in its The rent on its Piarco The lease payments on its current inventory of The cost of peanuts it serves to The salary paid to the Chief Executive How is the difference between average total cost and average variable cost impacted by an increase in output?Which of the following must be falling when the short run marginal cost is less than it, and rising when the short run marginal cost is greater than it? Choose all answers that are correct. a.Short run average total cost b.Variable cost c.Fixed cost d.Average variable cost
