If the total cost of producing 2 pounds of cheese is $6 and the total cost of producing 4 pounds of cheese is $8, then:
a. marginal cost of producing cheese declines as output increases.
b. average total cost of producing cheese declines as output increases.
c. average total cost of producing cheese increases as output increases.
d. average total cost remains constant irrespective of the change in output.
e. marginal cost remains constant irrespective of the change in output.
b
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The aggregate demand curve shows that, if other factors are held constant
A) higher price levels will result in higher total planned spending. B) higher price levels will result in lower total planned spending. C) lower price levels will result in inflationary conditions. D) higher price levels will result in lower interest rates.
If firms sell what they expected to sell, which of the following will be true?
A) Aggregate expenditure will be greater than GDP. B) Aggregate expenditure will be less than GDP. C) There is no unplanned change in inventories. D) Inventories will rise, and GDP and employment will fall.