Economies of scale exist whenever:
A. average total costs are stationary as output increases.
B. average total costs increase as output increases.
C. average total costs decline as output increases.
D. average total costs increase as output increases and average total costs are stationary as output increases.
Answer: C
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Use the following table, which lists output quantities and prices for the only three goods in the economy, to answer the next question. The base year is 2007.YearHot DogsBaseballsBottles of Beer?PriceQuantityPriceQuantityPriceQuantity2005$2.50100$2.5050$1.0010020064.001005.001002.0015020075.001005.001002.0020020088.001508.002004.00200200910.0020010.002004.00250The Consumer Price Index for the year 2005 is
A. 150. B. 100. C. 50. D. 200.
Barometric price leadership can occur when oligopolistic firms
A) compete on the basis of differentiated products. B) want to avoid price competition and violating antitrust laws. C) try to enforce cartel agreements. D) All of the above
Assuming that wine is a normal good, an increase in consumer income, other things being equal, will:
a. cause an upward movement along the demand curve for wine. b. shift the demand curve for wine to the left. c. cause a downward movement along the demand curve for wine. d. shift the demand curve for wine to the right.
The Coase bargaining solution applies to a situation when there is a ________ number of affected parties, and the transactions costs of bargaining are relatively ________.
A. large; high B. large; low C. small; high D. small; low