A firm experiencing constant economies of scale will have a long-run average cost curve that is:
a. upward sloping
b. vertical
c. downward sloping
d. horizontal
d
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Which economic question does the decision to produce butter instead of guns answer?
a. What to produce? b. How to produce? c. For whom to produce? d. Who has a comparative advantage in gun production? e. Who has an absolute advantage in butter production?
Average total cost is defined as:
A. total cost divided by price. B. variable cost divided by total output. C. variable cost divided by price. D. total cost divided by total output.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
?Kites /hourSnowboards /hourJesse81April123
Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 18.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is TRUE?
A. April has a comparative advantage in painting kites but not snowboards. B. April has a comparative advantage in painting snowboards but not kites. C. April has a comparative advantage in painting both goods. D. April does not have a comparative advantage in painting either good.