Returns to scale refers to
A. what happens to output when all inputs are varied in some proportion.
B. what happens to output when all inputs are held fixed.
C. the law of diminishing returns.
D. what happens to output when at least one input is fixed and one is varied.
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. A non-congested toll road is an example of a good that is excludable, but not rivalrous in consumption. 2. Public goods can frequently be provided by private action when the resulting benefits are widespread. 3. All economists agree that a public good is one the is nonrivalrous and nonexcludable. 4. When a public goods increases the desirability of living in a certain area, benefits tend to be captured entirely by an increase in land values. 5. In a Clarke tax scheme, the amount of tax that a person pays depends, in part, on his revealed preference for the public good.
In a free market, the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior
a. True b. False Indicate whether the statement is true or false
Which of the following shifts the demand for watches to the right?
a. a decrease in the price of watches b. a decrease in consumer incomes if watches are a normal good c. a decrease in the price of watch batteries if watch batteries and watches are complements d. an increase in the price of watches e. none of the above
Goods are scarce because
a. of greed; if human beings were not so selfish, goods would not be scarce. b. the desire for goods is far greater than their availability from nature. c. of competition; if people were not so competitive, it would be possible to satisfy people's desire for material goods. d. of private property; if things were not owned privately, scar