Which of the Following Is False

question 185

Multiple Choice

Which of the following is false?

• A) Average fixed cost continually declines as output increases.
• B) Marginal cost is equal to the change in total cost divided by the change in quantity of output.
• C) The law of diminishing marginal returns states that, in the long run, as ever larger amounts of a variable input are combined with fixed inputs, eventually the marginal physical product of the variable input will decline.
• D) The vertical distance between the AVC curve and the ATC curve declines as more output is produced.

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Definitions:

Demand for Dollars

Refers to the global desire or need for U.S. currency, driven by its use in international trade, investment, and as a reserve currency.

Balance of Payments Surplus

A situation where the total of the payments received from abroad exceeds the total of the payments made to abroad.

FX Reserves

Short for foreign exchange reserves; assets held on reserve by a central bank in foreign currencies, used to back liabilities on their own issued currency as well as to influence monetary policy.

Economic Fortune

The state of prosperity or success, especially as determined by economic variables such as income, employment, and market position.