1. If at the current output quantity , the marginal cost is below the average to
ID: 1164864 • Letter: 1
Question
1. If at the current output quantity , the marginal cost is below the average total cost , then:
a.marginal cost is decreasing
b.average total cost is increasing
c.average total cost is decreasing
d. average total cost is unchanged.
2.The Salvation Army belongs to the:
a.private, for-profit sector.
b.government not for profit sector
c.nongovernment, not for profit sector
d. public private partnerships.
3.If the price elasticity of demand for a good is less than one in absolute value, economists characterize that demand is:
a.very sensitive to price changes
b.elastic
c.inelastic
d.perfectly elastic.
Explanation / Answer
Q.1
a and c. Marginal cost curve is u-shaped it decreases then increases. AC also decreases then increases. MC will intersect AC at the minimum point. So if AC is falling MC will fall.
Q2.
c. Not for profit, charitable organization.
Q3.
C. Inelastic. The quantity demanded is not very responsive to changes in demand. If the elasticity is greater than one, the demand is elastic.
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