The minimum efficient scale is
A) the level of output where diminishing returns have not set in yet.
B) the plant size that yields the most profit.
C) the smallest level of operation where long-run average costs are lowest.
D) the smallest output level where the firm finally reaches productive efficiency.
Answer: C
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Consider the following:
(i) Can a good have both a downward-sloping Engel curve and a downward-sloping demand curve? Why or why not? (ii) Can a good have both an upward-sloping Engel curve and an upward-sloping demand curve? Why or why not?
Suppose a drought resulted in a major reduction in the California lettuce crop. In the market for lettuce,
A) the demand curve shifted to the right resulting in an increase in the equilibrium price. B) the supply curve shifted to the left resulting in a decrease in the equilibrium price. C) the supply curve shifted to the left resulting in an increase in the equilibrium price. D) the demand curve shifted to the left resulting in a decrease in the equilibrium price.
When the dollar strengthens,
A) exports will increase and U.S. consumers benefit. B) imports will increase and U.S. consumers benefit. C) exports will decrease and U.S. exporters benefit. D) exports will increase and U.S. exporters gain.
The question "why do national economies grow" would be a macroeconomic, rather than a microeconomic topic, because it
A. relates to the economy as a whole. B. studies a single market. C. considers the decisions of one industry. D. depends on the actions of suppliers.