When production is characterized by persistently declining long-run average costs as output increases
A) the costs of production are greater when competition exists than when a single firm produces a good.
B) it is impossible for two firms to compete in the market.
C) the costs are lower if a single firm exists, and even if the firm is unregulated, price will still be lower with a single firm.
D) there is no need for the government to limit competition by licensing requirements.
A
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A recessionary gap is the amount by which
A) the short-run equilibrium level nominal GDP is above the short-run real GDP. B) the short-run equilibrium level nominal GDP is below the short-run real GDP. C) total planned real expenditures exceed total planned production in the long run. D) the short-run equilibrium level of real GDP is below the full-employment level of real GDP.
Economists claim that measuring society's welfare as CS + PS
A) is inappropriate since ultimately everyone is a consumer. B) is valid only when the same person could be either a consumer or a producer. C) treats the gains to consumers and producers equally. D) is not commonly accepted.
The central fact of economics is
A. Production. B. Equilibrium. C. Efficiency. D. Scarcity.
Which of the following statements is TRUE about the optimal quantity of pollution?
A. Firms should be allowed to determine the profit-maximizing amount of pollution abatement. B. Pollution abatement should continue up to the point where marginal cost equals the average total cost. C. Trade-offs exist between producing a cleaner environment and producing other goods and services. D. It equals zero.