What factors generate economies of scale?
What will be an ideal response?
Economies of scale can be generated by specialization. As a firm's scale of operations increases, there are more opportunities for specialization of labor, and this usually is very productive. Further, there are certain physical relationships that generate economies of scale, such as that between the volume of a cylinder and the diameter of the cylinder. Finally, large-scale enterprise can take advantage of larger volume types of machinery which lower per-unit costs.
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Explain how the nominal wage rate is converted into the real wage rate. Explain why this process of conversion changes the nominal wage rate into the real wage rate
What will be an ideal response?
Which is not a reason the demand curve for loanable funds slopes down?
A. The value of the MRP in terms of today’s money shrinks as the interest rate rises. B. Future returns must be discounted more when the interest rate rises. C. As the interest rate rises, more and more investments become unprofitable. D. Production becomes more profitable in the future, reducing required inputs today.
When production costs fall,
a) the aggregate-demand curve shifts to the right. b) the short-run aggregate-supply curve shifts to the right. c) the short-run aggregate-supply curve shifts to the left. d) the aggregate-demand curve shifts to the left.
Movement along the aggregate demand curve occurs in reaction to ______, ceteris paribus.
a. nonprice-level determinants b. changes in the population c. levels of business confidence d. changes in the general price level