A Firm Is Producing 1,000 Units of Output for Which

question 45

Multiple Choice

A firm is producing 1,000 units of output for which the average variable cost of production equals 50 cents.The firm's total fixed costs equal $700.The total cost of producing 1,000 units of output equals:

• A) $700.
• B) $500.
• C) $1,000.
• D) $1,200.

---

Definitions:

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), representing the value of all goods and services produced over a specific period at constant prices.

Liquidity Preference Theory

Liquidity Preference Theory is a concept in Keynesian economics proposing that individuals prefer to hold their wealth in liquid form for convenience and security, influencing interest rates and economic activity.

Price Level

An index that measures the average of current prices across the entire spectrum of goods and services produced in the economy.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, usually on an annual basis.