Briefly summarize the empirical literature on the long-run costs typically incurred by firms in a variety of industries. In particular, is there reason to believe that firms' long-run cost curves assume the typical U-shape? Why or why not?
What will be an ideal response?
The existing research provides evidence that firms reach the minimum efficient scale of operation at a relatively low level of output and that economies of scale up to that point are not overly large. In addition, the studies indicate that, for many industries the LRAC is relatively flat beyond the MES. Thus, the evidence does not tend to support the typical U-shaped long-run average cost curve.
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If a nation can produce a good or service at the lowest opportunity cost, then it
A) might export or import the good, depending on whether or not it has a comparative advantage in the production of the good. B) can sell the product at a lower price than other nations. C) will definitely import the good because it can beat other countries' prices. D) does not want to export the good because the low cost means it makes only a low profit. E) is best for the nation to not trade the good internationally.
In more modern times as opposed to the times of Malthus, higher standards of living appear to
A) decrease death rates and increase birth rates. B) decrease death rates and also decrease birth rates. C) decrease death rates and have no effect on birth rates. D) have had effects on neither death rates nor birth rates.
The opportunity cost of any activity can be measured by the
a. value of the best alternative to that activity b. price (or monetary costs) of the activity c. level of technology d. time needed to select among various alternatives e. fringe benefits associated with the activity
An increase in the unemployment rate would affect tax receipts and government expenditures by
A. reducing tax receipts and expenditures. B. increasing tax receipts and expenditures. C. reducing tax receipts and raising expenditures. D. raising tax receipts and reducing expenditures.