Economies of scale exist as a firm increases its size in the long run because of all of the following except
A) as a larger input buyer, the firm can purchase inputs at a lower per unit cost.
B) as a firm expands its production, its profit margin per-unit of output increases.
C) the firm can afford more sophisticated technology in production.
D) labor and management can specialize even further in their tasks.
B
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A student argues: "Economic surplus is greatest at the level of output where the difference between marginal benefit and marginal cost is largest." This statement is false because
A. the marginal benefit and marginal cost relationship has no relevance to economic surplus. B. the level of output where the difference between marginal benefit and marginal cost is largest will be below the output level needed to have the maximum economic surplus. C. the level of output where the difference between marginal benefit and marginal cost is largest will also have the highest producer and consumer surplus. D. the level of output where the difference between marginal benefit and marginal cost is largest will be above the output level needed to have the maximum economic surplus.
In what sense is it a cost that people must spend time and resources coping with inflation?
a. Because the loss of time and resources frustrates people unnecessarily b. Because the time and resources could have been used to produce something else instead c. Because the time and resources could have been wasted elsewhere d. Because the time and resources are a sunk cost e. Because the time and resources are insufficient to cope with the problem
If the federal government were to run a budget deficit, this would:
A. increase the size of the national debt. B. reduce the size of the national debt. C. leave the size of the national debt unchanged. D. increase the national debt only if the government also expands the supply of money.
Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the surplus producers receive when an $8 per unit price floor is imposed on the market.
A. $3. B. $1. C. $5. D. $2.