______ refers to the output level at which average cost is lowest.
A. Interior solution
B. Economies of scope
C. Economies of scale
D. Efficient scale of production
D. Efficient scale of production
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The Fed sells $1 million in bonds to a bond dealer. The bond dealer's bank experiences
A) a decrease in assets of $1 million as its reserves decrease and an increase in liabilities of $1 million as its deposits rise. B) a decrease in assets of $1 million as its reserves decrease and a decrease in liabilities of $1 million as its deposits fall. C) no change in assets or liabilities. D) an increase in assets of $1 million as its deposits fell by $1 million, and a decrease in liabilities as its reserves fell by $1 million.
The marginal revenue product of labor is equal to
A. The change in total output divided by the change in the quantity of labor. B. The marginal physical product multiplied by the price. C. The change in the quantity of labor divided by the change in total revenue. D. The percentage change in total revenue divided by the percentage change in the quantity of labor.
In 1964, President Johnson improved the economy by passing the ______.
a. Reagan tax cuts b. Kennedy tax cuts c. American Recovery and Reinvestment Act d. Supply-Side Laffer Curve
Refer to Figure 3. Originally, Ben was producing at his point A and Jerry was producing at his point A. Then, each person decided to specialize in the product in which he has a comparative advantage. Furthermore, they agreed to trade 4 pounds of cones for 2 pounds of ice cream. As a result of these new arrangements, the gains from trade relative to the original situation are as follows:
a. 1 additional pound of cones for Ben and 1 additional pound of ice cream for Jerry.
b. 1 additional pound of ice cream for Ben and 1 additional pound of cones for Jerry.
c. 2 additional pounds of ice cream for Ben and 2 additional pounds of cones for Jerry.
d. 2 additional pounds of ice cream for Ben and 1 additional pound of cones for Jerry.