Returns to scale refers to the change in output when
A) all inputs increase proportionately.
B) labor increases holding all other inputs fixed.
C) capital equipment is doubled.
D) specialization improves.
A
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The "invisible hand" using Adam Smith's terminology refers to
a. government control of the market. b. market forces working through the price mechanism. c. the money supply that serves to keep the economy working smoothly. d. the role of innovation in maintaining a steady rate of growth. e. "behind-the-scenes" policy making to influence how markets allocate scarce resources.
Backward induction involves:
A. a process of analyzing a problem in reverse. B. thinking forward and working backward. C. starting with the last choice and working backward to determine an optimal strategy. D. All of these statements are true.
A country can benefit by indulging in international trade when:
a. it produces a good in which it has an absolute disadvantage. b. it produces a good in which its trading partner has an absolute advantage. c. it produces a good in which it has a comparative advantage. d. it produces all the goods which are supported by its resources. e. it produces nothing and merely depends on foreign imports.
Based on the graphs for an increase in aggregate demand and the Phillips curve, we can see that when aggregate demand is weak, ______.
a. RGDP is high
b. unemployment is low
c. inflation is low
d. inflation is high