When Average Cost Is Greater Than Marginal Cost, Marginal Cost

question 437

Multiple Choice

When average cost is greater than marginal cost, marginal cost must be

• A)rising.
• B)falling.
• C)constant.
• D)The direction of change in marginal cost cannot be determined from this information.

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Definitions:

Money Supply Growth Rate

The rate at which the amount of money available in an economy increases over a specific period.

Short-run Economy

The period in which the quantities of at least one input, such as capital, is fixed and firms adjust only labor inputs to change output levels.

Money Supply Growth Rate

The speed at which available monetary resources in an economy grow over a determined time frame.

Short-run Phillips Curve

A graphical representation indicating an inverse relationship between the rate of inflation and the rate of unemployment in the short term.