In the production of bicycles an increase of 2 percent in the level of capital and labor respectively will generate an increase of 1 percent in the production of bicycles. From this information we know that the production of bicycles exhibits
A. decreasing returns to scale.
B. increasing returns to scale.
C. constant returns to scale.
D. diminishing marginal returns.
Answer: A
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Which of the following statements about full employment is correct? I. Full employment means that the unemployment rate is less than 1/2 of 1 percent. II. Full employment means that the transaction costs associated with getting a job are zero
A) I only B) II only C) Both I and II D) Neither I nor II
The outcome of the game in the figure shown predicts that Joe will earn utility of:
This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
A. 5.
B. 7.
C. 9.
D. 13.
Decreasing-cost conditions commonly happen in ______.
a. short intervals of input expansion b. long intervals of input expansion c. short intervals of output expansion d. long intervals of output expansion
Based on the demand curves for perfectly competitive firms and monopolists, the loss in revenue due to price effect applies to ______.
a. only monopolists
b. only perfectly competitive firms
c. both monopolists and perfectly competitive firms
d. neither monopolists nor perfectly competitive firms