A cost function has economies of scale if
A) average fixed costs fall as production increases.
B) total costs fall as production increases.
C) the average total cost falls as production increases.
D) it is less expensive to produce goods jointly rather than separately.
C
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If an economy experiences a $0.8 trillion increase in investment resulting in an increase in real GDP from $10 trillion to $12 trillion,
a. what is the change in equilibrium expenditure? b. what is the change in autonomous expenditure? c. what is the multiplier? d. how would an increase in the marginal tax rate effect the multiplier?
What does the phrase "post hoc, ergo propter hoc" mean?
What will be an ideal response?
Diseconomies of scale exist for all of the following reasons except:
a. bureaucratic inefficiencies. b. management problems. c. failures in information flows. d. firm size is too small. e. organizational problems.
The combination of inefficiently high demand and dwindling quantity leads to what is called:
A. the free rider problem. B. nonexcludable consumption. C. rival in consumption. D. the tragedy of the commons.