Economies of scale exist when
A. fixed cost decreases as output increases.
B. long-run marginal cost is less than long-run average cost.
C. long-run average cost decreases as output increases.
D. both a and b
E. both b and c
Answer: E
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"The plan to create private accounts in Social Security will reduce benefits for some workers," is an example of a ________ statement, while "Social Security will be better if the private accounts are allowed" is an example of a ________ statement.
A. structural policy; fiscal policy B. normative; positive C. positive; normative D. monetary policy; fiscal policy
What is the result of an agricultural support price established above the equilibrium price?
A) The market gravitates toward and remains in equilibrium. B) There will be excess quantity supplied of the product involved. C) There will be excess quantity demanded the product in this market. D) Since the support price is set above the equilibrium price, it will have no impact on the market price.
Transferrable pollution permits make pollution reduction______.
a. unnecessary b. illegal c. expensive d. profitable
Assume there are only two goods in the economy, apples and bananas. In 2018, 2,000 apples were sold at $1 each and 8,000 bananas at $0.60 each. In 2019, the price of apples rose to $1.5 and the quantity rose to 2,200; the price of bananas rose to $0.80 and the quantity sold rose to 8,500. Calculate the GDP deflator in 2019 using 2018 as the base year.
What will be an ideal response?