Which of the Following Statements About Cost Is Correct

question 94

Multiple Choice

Which of the following statements about cost is correct?

• A) Marginal cost is constant.
• B) Marginal cost is always falling.
• C) Average total cost is U-shaped.
• D) Average total cost always declines.

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Definitions:

Adaptive Expectations

A theory in economics that expectations of future events are constructed based on past events and that agents adjust slower to new information.

Monetarists

Economists who emphasize the role of governments in controlling the amount of money in circulation as a primary method for managing the economy and combating inflation.

Money Supply

The comprehensive sum of money resources in an economy, encompassing cash, coins, and deposits in checking and savings accounts, at a specific moment.

Real Output

A measurement of the economic production adjusted for price changes, often used to evaluate the size and health of an economy.