Forces that cause long-run average cost to fall as output expands are known as
a. returns to scale.
b. scale efficiencies.
c. economies of scale.
d. optimizing forces.
c. economies of scale.
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Which of the following statements is TRUE about profits?
A) Profits are considered a cost of doing business. B) Profits are excluded from the circular flow of the income diagram. C) The only portion of profits that are included in the circular flow diagram are the portion paid out in the form of dividends. D) Profits are considered one of the resources necessary for production.
A rise in the price level produces a ________ the aggregate supply curve
A) rightward shift of B) movement downward along C) leftward shift of D) movement upward along E) rightward shift of the aggregate supply curve and a movement downward along
If the dollar's value changes from 120 yen per dollar to 110 yen per dollar, the dollar has
A) depreciated. B) appreciated. C) demanded. D) devalued.
Assume the short-run average total cost for a perfectly competitive industry decreases as the output of the industry expands. In the long run, the industry supply curve will:
a. have a positive slope. b. have a negative slope. c. be perfectly horizontal. d. be perfectly vertical.