In Figure 4.2, the reason that point A is not through the origin but starts up on the vertical axis is that 
A. there are fixed outputs.
B. there is no cost associated with producing no output.
C. there is waste.
D. there are fixed costs.
Answer: D
You might also like to view...
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model? a. The real risk-free interest rate falls and GDP Price Index rises
b. The real risk-free interest rate falls and GDP Price Index falls. c. The real risk-free interest rate rises and GDP Price Index falls. d. The real risk-free interest rate and GDP Price Index remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Suppose when the price of shoe laces goes from $1 to $2 per pair, production increases from 95 million pairs to 105 million pairs per year. Using the mid-point method, the price elasticity of supply is:
A. 6.28 B. 66 percent C. 10.5 percent D. 0.15