Suppose that just by doubling the amount of output that it produces each year, a firm's per-unit production costs fall by 30 percent. This is an example of:
What will be an ideal response?
Economies of scale correct
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Give an example of how money functions as a unit of account
What will be an ideal response?
Which of the following did not occur during the Industrial Revolution?
a. Production became more reliant on highly specialized equipment. b. A more efficient division of labor was promoted. c. Workers bore much of the costs of production. d. The transaction costs of contracting with individual resource owners were reduced. e. Technological development increased the productivity of most workers.
Which of the following is not a variable in the index of leading indicators?
a. Average work week. b. Duration of unemployment. c. Employment claims. d. New businesses.
The market price of the product produced by Jones Inc, is $6 per unit, which is higher than the average cost of $4 per unit at the profit maximizing output level. The average variable cost of production is $3.5 per unit. If demand for its product declines due to introduction of cheaper substitutes and the market price of the product falls to $3.8 per unit, which of the following statements will
be true? a. The firm will close down in the short run. b. The firm will continue production as long as the market price is above average variable cost. c. The firm will continue production as long as the market price exceeds fixed cost. d. The firm will minimize it losses by producing where average variable cost equals $3.8.