Average Total Cost

question 34

Multiple Choice

Average total cost:

• A)decreases when output levels are low, then increases as output increases.
• B)increases when output levels are low, then decreases as output decreases.
• C)is minimized when it equals average variable cost.
• D)is maximized when it equals marginal cost.

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Definitions:

Classical Economists

Economists from the 18th and 19th centuries who focused on the importance of free markets, competitive forces, and the self-regulating nature of economies.

Demand

The desire and ability of consumers to purchase goods and services at given prices, influencing market equilibrium and pricing strategies.

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, typically identified by a fall in GDP in two successive quarters.

Keynes

Pertains to John Maynard Keynes, an English economist whose theories revolutionized macroeconomic practice and government economic strategies.