External economies of scale arise when the cost per unit
A) falls as the industry grows larger and rises as the average firm grows larger.
B) rises as the industry grows larger and falls as the average firm grows larger.
C) falls as the industry and the average firm grows larger.
D) remains constant over a broad range of output.
E) rises as the industry and the average firm grows larger.
A
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Which of the following would shift the supply curve for smartphones to the right?
A) an increase in consumer income (assuming that all smartphones are normal goods) B) an increase in the price of a substitute in production C) a decrease in the price of an input used to produce smartphones D) a decrease in the number of firms that produce smartphones
On the 45-degree line diagram, the 45-degree line shows points where
A) real aggregate expenditure equals real GDP. B) real aggregate expenditure equals C + I. C) real income equals real GDP. D) real aggregate output equals the quantity produced.
According to the Net Present Value (NPV) rule, managers choose to invest if
a. The NPV of the project is less than zero b. The NPV of the project is greater than zero c. The NPV of the project is equal to zero d. The NPV of the project is equal to the cost of capital
If a perfectly competitive firm made an economic profit in the short run, but not in the long run, it must be true that
a. prices for inputs increased b. demand declined c. new firms entered, supply increased, and price fell d. accounting profit exceeds economic profit e. labor costs are increasing