Which of the following best describes average variable cost?
a. The change in total cost when one additional unit of output is produced.
b. Total cost divided by the quantity of output produced.
c. Total variable cost divided by the quantity of output produced.
d. Total fixed cost divided by the quantity of output produced.
e. Costs that do not vary as output varies.
c
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How does the aggregate-demand curve shift when increased uncertainty and pessimism about the future of the economy lead firms to desire less investment spending?
a. The curve shifts to the right. b. The curve shifts to the left. c. The curve does not shift at all. d. The curve first shifts to the right and then shifts to the left.
An increase in total factor productivity shifts the production function
A) upward and increases the marginal product of labor. B) upward and decreases the marginal product of labor. C) downward and increases the marginal product of labor. D) downward and decreases the marginal product of labor.