Assume the LRAC curve for a particular industry hits its minimum point at a relatively low level of output and then increases, and the demand for industry output is quite large
In this case, consideration of the minimum efficient scale of operation suggest that the market should be served by: A) a large number of small firms to minimize production costs.
B) a small number of large firms to minimize production costs
C) a large number of large firms to minimize production costs.
D) an indeterminate number of firms of indeterminate size to minimize production costs.
A
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Use the figure below to answer the following question.
In the past few years, the demand for donuts has increased. This would be illustrated by a change from
A. point 6 to point 3. B. point 5 to point 2. C. point 4 to point 6. D. point 1 to point 2.
Current income is 300, expected future income is 363, and the interest rate is 10%. If current income rises to 363 and consumption is smoothed across periods, then consumption in each period becomes
a) 326.7 b) 363 c) 399.3 d) 350 e) 371
Variables that change before real GDP changes are measured by the:
A. personal income index. B. real GDP index. C. forecasting gauge. D. index of leading indicators.
Supply-side economics argues that changes in ________ affect incentives to work.
A. marginal cost B. marginal income C. marginal profit D. marginal tax rates