If a single large firm is able to produce a market’s output less expensively than many small firms is evidence that, for this market, there are
A. increasing returns to scale.
B. constant returns to scale.
C. decreasing returns to scale.
D. regulations in place that limit production costs.
Answer: A
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The Lithuanian tax rate for all citizens' income is 24 percent. If the Lithuanian government was concerned about income inequality, they should change the tax system from a system that is currently ________ to a system that is ________
A) progressive; proportional B) regressive; progressive C) proportional; progressive D) proportional; regressive
How do economies of scale contribute to the development of an oligopoly?
A) Economies of scale make it legally difficult for new firms to enter. B) Economies of scale make small-scale producers inefficient. C) Economies of scale are based on control of a key resource, without which other firms cannot enter an industry. D) Economies of scale are guaranteed when a patent is granted.
If the dollar rose by 35% relative to other currencies, our current account deficit would
A. rise sharply. B. rise slightly. C. not be affected. D. fall slightly.
Governments grant patents to encourage
A) research and development on new products. B) competition. C) low prices. D) firms to form public enterprises.