Why do monopolies lack productive efficiency?
a. Because barriers to entry eliminate competition
b. Because they produce at the bottom of the average cost curve
c. Because investments in innovation are costly
d. Because they are unable to achieve economies of scale
a. Because barriers to entry eliminate competition
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Wealth equals:
A. current income minus spending on current needs. B. investment minus saving. C. assets minus liabilities. D. saving minus investment.
When technology increases the supply of a good and lower prices increase the quantity demanded,
A) the economy is reallocating resources to achieve an efficient allocation. B) consumer surplus falls. C) the invisible hand is unnecessary. D) the marginal benefit of the good increases with the quantity produced. E) the economy is no longer efficient because the quantity changes.
Models are used to describe cause-and-effect relationships.
Answer the following statement true (T) or false (F)
The theory of land rent holds that
a. capital invested on any plot of land must yield the same return as capital invested on any other plot of land. b. the difference between the costs of producing on any two pieces of land must equal the difference between their rents. c. marginal land earns no rent. d. All of the above are correct.