What is the difference between between total costs, variable costs, and fixed costs?
What will be an ideal response?
Total costs are the costs of all inputs a firm uses in production. Variable costs are costs that change as output changes. Fixed costs are costs that remain constant as output changes. Total cost is equal to the sum of variable costs and fixed costs.
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For the past 15 years the American public has wanted to buy big trucks. The Big Three automakers delivered, investing billions in plants that build gas guzzlers. Now, when customers walk into showrooms, gas mileage is on their mind
Retooling the industry will take years, so in the meantime GM, Ford and Chrysler are tweaking their existing models. They're changing tires, adjusting transmissions and exhaust valves in hopes of getting one or maybe two more miles per gallon. Which of the decisions by the Big Three to gain gas mileage is a short run decision? A) adjusting exhaust valves B) adjusting transmissions C) changing tires D) All of these decisions are short run decisions.
According to the adaptive expectations theory, people form their expectations of the future on the basis of future expectations
a. True b. False Indicate whether the statement is true or false