An increase in output would result in no change in long-run average costs when there are
A) economies of scale.
B) diseconomies to scale.
C) constant returns to scale.
D) diminishing marginal product.
Answer: C
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Bill owns "Bill's Home of Blues" a store that specializes in selling CDs and DVDs of blues musicians of the 1960s and 1970s. Bill took out a loan from his bank to pay for his store and its initial inventory
Bill pays the bank $900 per week for his loan. The $900 bank payment A) is a short-run implicit cost. B) is a fixed cost. C) is a variable cost. D) is a long-run implicit cost.
The production function is concave in capital because
A) the contribution to production of each additional unit of capital decreases. B) the marginal product of capital is increasing. C) the marginal product of labor is decreasing. D) the cost of loans increases with their quantity.
All of the payment to a factor of production will be economic rent when the factor of production has:
A) an infinitely inelastic supply curve. B) an infinitely elastic supply curve. C) a constant, unit elastic supply curve. D) an infinitely inelastic demand curve.
If both demand and supply change, the two equilibrium values would change depending on the relative ______ of the changes in supply and demand.
a. consequences b. magnitude c. timing d. accuracy