If economies of scale exist for a particular production relationship, long-run average costs will
A. rise.
B. fall.
C. first rise and then fall.
D. be unaffected since there is no direct relationship between the two.
Answer: B
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Lowering the reserve requirement ________.
A. reduces the amount of excess reserves the banks keep B. turns required reserves into excess reserves C. increases the total reserves in the banking system D. also reduces the discount rate
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
For which of the following does a consumer have the most options if he or she waits a while after a price change?
a. salt
b. gasoline
c. medical care and hospitalization
d. china, glassware
In the United States, which of the following is an example of a government-inhibited good?
A. education B. cocaine C. sports stadiums D. museums