In the electricity generation industry, the cost per kilowatt hour of electricity declines as the capacity to generate output increases. This situation represents:
a. a poor opportunity for investors.
b. constant returns to scale.
c. diseconomies of scale.
d. economies of scale.
e. decreasing returns to scale.
d
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The implementation of the assembly line is an example of how
A) changes in the organization of production improve productivity. B) neutral technical change improves productivity. C) non-neutral technical change can decrease productivity. D) labor saving technical change increases economy-wide unemployment.
Answer the following questions true (T) or false (F)
1. Natural resource cartels such as OPEC are inherently unstable because their members operate with excess capacity and have an incentive to cheat on their output quotas. 2. Because many business situations are repeated games, firms may be able to avoid the prisoner's dilemma and implicitly collude to keep prices high. 3. Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to simultaneous games.
If an economy produces 2,000 units of output with a price level of $2 and the money supply (M) is $1,000, velocity is:
A. 4. B. 500. C. 1. D. 2.
Output per capita would grow if:
a. the number of workers grow faster than the population. b. the population grows faster than the labor force. c. there was a greater level of disposable income. d. the number of illegal immigrant workers were reduced.