If the average cost curve is downward sloping, then
a. marginal cost is smaller than average cost.
b. the marginal cost curve is also downward sloping.
c. there are increasing marginal returns to labor.
d. wages and other input prices are falling.
a. marginal cost is smaller than average cost.
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A typical economy produces thousands of different goods. Is it accurate to say that society faces a production possibilities frontier?
A. No, because two dimensions cannot capture the complexity of a full economy. B. No, although a graph with several thousand dimensions would be appropriate. C. Yes, although society does not face opportunity cost and the model does not apply. D. Yes, because scarcity always imposes opportunity costs. E. Uncertain, economic theory has no answer to this question.
A network externality refers to a situation where:
A) the value of a product increases as more consumers start to use it. B) firms collude to sell products at a price higher than the equilibrium market price. C) a firm that has control over key resources auctions the resources off to other firms. D) the government interferes to prevent the concentration of market power in the hands of a few firms.
On the graph above, the labeled point at which investment — planned plus unplanned — is highest is point ________
A) A B) B C) G D) H E) not inferable from the information given
Writing in the 18th century, Adam Smith downplayed technology as a factor contributing to a nation's economic growth
Indicate whether the statement is true or false