Which of the following statements about an increasing-returns-to-scale industry is not true?
a. It will tend to concentrate production in the hands of a very few large firms.
b. Firms in the industry face higher costs per unit of production as their level of output increases.
c. Opportunity costs may fall with the level of output.
d. Proponents of strategic trade policy contend that tariffs can be used to stimulate production by a domestic industry capable of achieving increasing returns to scale.
e. The costs of producing a unit of output fall as more output is produced.
b
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If the opportunity cost of producing more of one good increases as more of that good is produced, then the production method is inefficient
Indicate whether the statement is true or false
What is the primary reason that the highest quintile's share of the national income increased very rapidly over the last 20 years?
A. Poor people are lazy and do not want to work. B. All of our jobs have been shipped overseas. C. Tax cuts on the property owners and high income citizens. D. High cost of health care.
What is the main argument which explains why an increased public deficit financed tax cut may not result in increased consumption?
A) People will increase savings to "finance" debt repayment by future generations. B) People will increase consumption to "finance" debt repayment by future generations. C) Savings is determined by uncertain events, the timing of future illnesses and death. D) Savings is determined by certain events, the timing of future illnesses and death.
Most economists agree that exclusive reliance on direct controls
a. is a sound approach. b. has worked well for us in the past. c. is cheaper than any other enforcement mechanism. d. is a mistake.