Economies of scale imply: (i) a continuously falling AC curve or (ii) a larger output is more efficient than a smaller output.
A. i and ii
B. i but not ii
C. ii but not i
D. neither i nor ii
Answer: A
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Lucy buys only magazines and CDs. Both are normal goods. Lucy's income decreases, but the prices of magazines and CDs do not change. Marginal utility theory predicts that Lucy will ________
A) buy fewer magazines and fewer CDs B) substitute magazines for CDs C) increase her marginal utility from both magazines and CDs by buying more magazines and CDs D) buy more magazines and more CDs
In financial markets, when a firm issues stock for the first time it is called an
A) investment portfolio option. B) initial public offering. C) initial portfolio offering. D) investment portfolio offering.
In the early 1990s, which nation took the lead in driving up European interest rates?
A) Spain B) France C) Germany D) England E) none of the above
Farmers rotate their crops between corn and soybean to increase crop yields. This behavior exhibits
a. Economies of scale b. Economies of scope c. Diseconomies of scale d. Diseconomies of scope