If a sandwich shop produces zero sandwiches, which of the following costs will it still incur?
A. Rented storefront
B. Sandwich ingredients
C. Employee's wages
D. None of these costs will be incurred if they no longer make sandwiches.
Answer: A
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A key contribution of Ronald Coase is that he pointed out that private transactions are efficient when the number of parties involved is small
A) and when property rights are well defined and transactions costs are low. B) and when property rights do not exist. C) and that property rights are irrelevant to the existence of externalities. D) and when corporations are not greedy.
Explain the law of supply. What does the law of supply imply about the shape of the supply curve?
What will be an ideal response?
Economies of scale are illustrated by:
A) a downward sloping long-run average cost curve. B) a flat long-run average cost curve. C) an upward-sloping long-run average cost curve. D) a downward-sloping short-run average total cost curve.
In the long run, higher government budget deficits will
A) lead to a redistribution of real GDP from privately produced goods and services to government produced goods and services. B) lead to a redistribution of real GDP from government produced goods and services to privately produced goods and services. C) cause the price level to go down on government goods but not on private goods. D) lead to a reduction in the amount of goods and services produced by the government and private sector.