If in some production range average cost is rising, the firm is experiencing
a. increasing returns to scale.
b. decreasing returns to scale.
c. constant returns to scale.
d. increasing costs per unit of output.
b
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When constructing a production possibilities frontier, which of the following assumptions is not made?
a. The economy produces only two goods or two types of goods. b. Firms produce goods using factors of production. c. The technology available to firms is given. d. The quantities of the factors of production that are available are increasing over the relevant time period.
If U.S. consumers increase their demand for apples from New Zealand, then other things the same New Zealand's
a. imports and net exports rise. b. imports rise and net exports fall. c. exports and net exports rise. d. exports rise and net exports fall.
Consumption of fixed capital (depreciation) can be determined by:
a) adding taxes on production and imports to NDP. b) subtracting NDP from GDP. c) subtracting net investment from GDP. d) adding net investment to gross investment.
Ms. Birnbaum is buying bottles of beer and bags of pretzels. The marginal utility of the last bottle of beer is 60 and the marginal utility of the last bag of pretzels is 30. The price of beer is $0.30 per bottle and the price of pretzels is $0.20 per bag. Ms. Birnbaum
A. is not spending all her income. B. should buy more pretzels and less beer. C. is buying beer and pretzels in the utility-maximizing amounts. D. should buy more beer and fewer pretzels.