Is it possible for the average fixed cost curve to have the shape depicted above? Explain
What will be an ideal response?
Average fixed costs are equal to the total fixed costs divided by output. Mathematically speaking this figure will continue to fall since the number in the numerator remains fixed while the number in the numerator rises. Therefore, it isn't possible for the average fixed cost curve to have the shape that is depicted in this graph
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The process by which banks screen potential applicants by eliminating bad risks and to obtain a pool of creditworthy borrowers is called:
A) gap analysis B) duration analysis C) credit-risk analysis D) liquidity analysis
A risk-averse manager is hired to run a firm for shareholders. If the manager's effort can be observed and specified in a contract, which would be the best employment contract?
a. a high-powered incentive contract to elicit the most effort. b. a fixed salary paid as long as the required effort is undertaken. c. a proportion of profits paid as long as the required effort is undertaken. d. a wage well in excess of his or her outside opportunity.