Constant returns to scale indicate that a firm is experiencing:
a. per unit costs of production that are decreasing as the scale of output expands.
b. per unit costs of production that remain stable as the scale of output expands.
c. per unit costs of production that are increasing as the scale of output expands
d. an increasing marginal product.
b
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Which of the following statements is NOT true about exchanges in the market system?
A) In voluntary exchange both parties are better off because of the exchange. B) Exchanges occur only in situations of barter where the market price is irrelevant. C) Prices indicate what is relatively abundant and what is relatively scarce. D) Transaction costs in exchanges include the cost of enforcing a contract as well as the costs of information.
Shirking of one's duties is often encountered in team production settings because
a. few individuals are well-intentioned b. teamwork is recognized as less significant than individual performance c. teammates face a dilemma posed by a dominant strategy to shirk d. reputation effects dominate in long-term teams e. teamwork can be less than the sum of the individual parts
In financial markets, buyers are people who:
A. want to spend money on something of value right now, but don't have cash on hand. B. have cash on hand and are willing to let others use it, for a price. C. want to spend money on something of big value in the future, but don't know how to save for it. D. have cash promised to them at some future date.