A positively sloped long run average cost implies:
a. economies of scale.
b. constant returns to scale.
c. diseconomies of scale.
d. diminishing marginal returns to a factor.
e. increasing returns to scale.
c
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Which of the following leads to a deadweight loss? i. competition ii. taxes iii. consumer surplus iv. monopoly
A) ii only B) iii and iv C) i and ii D) ii and iv E) i, ii, and iii
Other things constant, the demand for an inferior good will decrease (the demand curve will shift left) if
A) the price of a complementary good decreases. B) the price of a substitute good increases. C) income increases. D) income decreases.
The main problem with accepting the national security argument as a valid reason to restrict international trade is that
a. other countries could have produced the goods more efficiently b. almost all industries could be described as being vital to national security c. technology secrets are difficult to keep from other countries in this age of computer information d. it will become too expensive to produce national security goods within the country e. in reality, tariffs are impossible to enforce effectively because of the black market
When managers of firms in a competitive market observe falling profits, they may infer that the market is experiencing
a. a violation of conventional market forces. b. over-investment. c. the entry of new firms. d. too few firms in the market.