How is the total cost of a factory or other production site determined?
(A) Fixed cost plus marginal cost.
(B) Fixed cost plus variable cost.
(C) Marginal cost plus variable cost.
(D) Marginal cost plus output cost.
Ans: (B) Fixed cost plus variable cost.
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The table above gives the purchases of an average consumer in a small economy. (These consumers purchase only loaves of bread and jugs of soda.) Suppose 2010 is the reference base period
a. What quantities are in the CPI market basket? b. What is the cost of the CPI market basket using 2010 prices? c. What is the cost of the CPI market basket using 2011 prices? d. What is the CPI in 2011?
Refer to Figure 4.4. The international capital market will be in equilibrium when the real interest rate in the United States is ________ and the real interest rate in the rest of the world is ________
A) 7%; 3% B) 5%; 7% C) 9%; 3% D) 5%; 5%