A firm's AC will eventually begin to rise because
a. managers' salaries rise with output.
b. bottlenecks may be reached for some inputs.
c. MFC begins to rise near capacity.
d. the range of negative returns is reached.
b
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In the long run, output gaps are eliminated by:
A. reducing potential output. B. increasing potential output. C. increased efficiency in labor markets. D. price changes.
It's difficult to measure asset inflation because asset prices can increase when assets become more productive.
Answer the following statement true (T) or false (F)
??Firm 2???High PriceLow PriceFirm 1High PriceFirm 1 earns $100; Firm 2 earns $100Firm 1 earns $25; Firm 2 earns $150?Low PriceFirm 1 earns $150; Firm 2 earns $25Firm 1 earns $50; Firm 2 earns $50Table 12.2The diagram shown in Table 12.2 describes a game in which:
A. firms make their decisions simultaneously. B. Firm 1 always decides first, and Firm 2 always decides last. C. the firms take turns moving first. D. firms must communicate with each other before making a decision.
Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of U.S. GDP, then:
A. unemployment will decrease domestically. B. U.S. real GDP will fall. C. inflation will occur domestically. D. U.S. real GDP will rise.