In this section, write whether each statement is True, False or Uncertain. Please fully explain your answer using a diagram. No credit will be given for an answer without an explanation. 1) As long as the marginal cost of production is greater than the average variable cost, the average variable cost is increasing. 2) If demand increases and supply increases at the same time, prices will clearly fall.
In this section, write whether each statement is True, False or Uncertain. Please fully explain your answer using a diagram. No credit will be given for an answer without an explanation. 1) As long as the marginal cost of production is greater than the average variable cost, the average variable cost is increasing. 2) If demand increases and supply increases at the same time, prices will clearly fall.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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How would I answer these?
Transcribed Image Text:### Section II: True/False/Uncertain Questions
#### Instructions:
Answer all questions. In this section, write whether each statement is True, False, or Uncertain. Please fully explain your answer using a diagram. No credit will be given for an answer without an explanation.
1. **Statement 1:**
As long as the marginal cost of production is greater than the average variable cost, the average variable cost is increasing.
2. **Statement 2:**
If demand increases and supply increases at the same time, prices will clearly fall.
*Note: To answer these questions, consider illustrating the concepts with appropriate diagrams. For Statement 1, graph the marginal cost (MC) and average variable cost (AVC) curves to show the relationship between them. For Statement 2, use supply and demand curves to explore various scenarios based on shifts in both curves.*
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