Economies of scale are said to exist when inputs are increased by some percentage and output increases by a(n) __________ percentage, causing unit costs to __________.

Explain how relatively high wages in the modern sector, as compared to the traditional sector, can lead to a coordination failure

What will be an ideal response?

If two firms produce the same product but have different supply curves,

A) this would indicate that some other variable differs across the two firms. B) this would indicate that all variables are the same across the two firms. C) this would indicate that one or both of the firm's managers are misinformed. D) this would indicate a need for government regulation.

An improvement in a firm's technology that reduces its production costs will result in a(n):

a. rightward shift of the supply curve. b. increase in supply. c. increase in quantity supplied at any given price. d. all of these are true.

Refer to the game theory matrix where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. Without collusion, the outcome of the game:

A.  maximizes joint profits for the firms.
B.  results in a prisoner's dilemma.
C.  results in greater economic efficiency.
D.  forces one or more firms out of the industry.