Carefully explain the difference between diseconomies of scale and diminishing returns
What will be an ideal response?
Diseconomies of scale means that, in the long run, average costs are rising, usually due to coordination problems or decreasing returns to scale. Diminishing returns means that, in the short run, marginal product is falling (or marginal cost is rising) because each additional worker is producing less than the one before him, due to the fact that capital (or some other factor of production) is fixed. There is no connection between these things.
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The enclosure movement in England in the 17th century represented an attempt to transform
a. a public good into a private good. b. a private good into a public good. c. a private good into a common resource. d. a common resource into a private good.
Which of the following illustrates a barter transaction?
A) A bushel of oranges is traded for a bushel of apples. B) Someone buys a pizza for the special price of $4. C) Someone buys a house for $100,000. D) b and c E) a, b, and c
In general, firms in a cartel:
A. agree to set price equal to marginal cost. B. do not consider the actions of the other firms in the cartel when making output decisions. C. produce levels of output exceeding the monopoly output level. D. agree to charge the price the monopolist would charge.
If an investor owns a well-diversified portfolio, then:
A. His portfolio does not involve any risk B. The idiosyncratic risk in his portfolio is minimized C. The systemic risk in his portfolio is minimized D. His portfolio will have the highest expected return