The difference between average total cost and average variable cost decreases with an increase in output.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Darlene runs a fruit and vegetable stand in a medium-sized community where there are many such stands. Her weekly total revenue equals 2,000 . Her weekly total cost of running the stand equals 3,500, consisting of 2,500 of variable costs and 1,000 of fixed costs. An economist would likely advise Darlene to:
a. shut down as quickly as possible in order to minimize her losses.
b. keep the stand open because it is generating an economic profit.
c. keep the stand open for a while longer because she is covering all of her variable costs and some of her fixed costs.
d. keep the stand open for a while longer because she is covering all of her fixed costs and some of her variable costs.
QUESTION 3If the Gini coefficient for the United States is 0.47 and that for India is 0.36, which of the following statements is true?
a. The U.S. being an industrialized nation has a lower income inequality than India.
b. The Lorenz curve for the U.S. lies above the Lorenz curve for India.
c. India, in spite of being a developing nation, has lesser income inequality than the U.S.
d. The Lorenz curve for India would coincide with the line of perfect equality.
e. The distribution of income in both the economies are equal.
QUESTION 4Which of the following statements is true regarding protocols in various types of auctions?
a. An English auction requires bidders to begin with the highest price.
b. A Dutch auction starts with the lowest price any bidder is willing to pay, which is displayed in a one-handed clock.
c. In a Dutch auction, the first buyer to bid gets the item at the price shown in the one-handed clock.
d. In a second-price auction, the second-highest bidder gets the item.
QUESTION 5If the cost borne by a firm when output is zero is 100 and that of producing 5 units is 250, then the variable cost of the firm is equal to 150.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6The short-run supply curve of a perfectly competitive firm is:
a. the average variable cost curve.
b. the average total cost curve.
c. the same as the demand curve.
d. marginal cost above average variable cost.
QUESTION 7Empirical observations validate that the Gini co-efficient for the U.S. economy was between 0.35 and 0.37 until the 1990s, after which it has increased and reached 0.469 in 2009 . Which of the following can be inferred from this?
a. The distribution of national income in the U.S. has become slightly more equal since the 1990s.
b. The government spending on poverty alleviation has increased since 1990.
c. More jobs have been created in the U.S. since 1990.
d. The distribution of national income in the U.S. has become slightly more unequal since the 1990s.
e. The government has replaced the existing regressive tax structure with a progressive tax structure.
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