Internal economies of scale means that
A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs.
B) firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market.
C) consumers will have less choices once trade begins, because firms will be squeezed out of the market.
D) expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output.
D
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The basic economic problem is a situation of
A) limited resources and unlimited wants. B) both limited resources and limited wants. C) limited incomes and unlimited choices. D) unlimited incomes and limited choices.
If the long-run supply curve is upward sloping, we know that
A) entrepreneurs are earning higher profits as output expands. B) some input prices are increasing as the industry expands. C) firms are getting larger as the industry contracts. D) the law of diminishing marginal returns has set in.
The consumption function has a negative slope
a. True b. False Indicate whether the statement is true or false
Refer to the budget line shown in the diagram. If the consumer's money income is $20, which of the following combinations of goods is unattainable?
A. 4 units of C and 6 units of D.
B. 5 units of C and no units of D.
C. 1 unit of C and 8 units of D.
D. 2 units of C and 6 units of D.