Evidence from empirical studies of long-run cost-output relationships lends support to the:
a. existence of a non-linear cubic total cost function
b. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firm
c. hypothesis that total costs increase quadratically over the ranges of output examined
d. hypothesis that total costs increase linearly over some considerable range of output examined
e. none of the above
d
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Macroeconomic equilibrium occurs when
A) there is no inflation. B) real GDP is equal to potential GDP. C) the aggregate quantity demanded is equal to the aggregate quantity supplied. D) the economy is fully employed. E) the price level equals the potential price level.
Horatio can produce either a combination of 15 bird houses and 25 wind chimes or a combination of 30 bird houses and 15 wind chimes. If he now produces 30 bird houses and 15 wind chimes, what is the opportunity cost of producing an additional 10 wind
chimes? A) 2 bird houses B) 15 bird houses C) 30 bird houses D) 45 bird houses