Which of the following examples shows external diseconomies of scale?
a. As Fresh Farms expands, it hires more unskilled workers to tend and harvest crops.
b. As Colso Mining expands, the average wage scale for miners increases industrywide.
c. As Coyote Bus Service expands, it improves its training of drivers.
d. As Jack’s Fisheries expands, it buys more efficient boats.
b. As Colso Mining expands, the average wage scale for miners increases industrywide.
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A drop in consumption or investment spending caused by increased government spending is referred to as:
a. the multiplier effect. b. an expansionary gap. c. Ricardian equivalence. d. the paradox of thrift. e. crowding out.
A perfectly inelastic demand curve is: a. parallel to the horizontal axis
b. parallel to the vertical axis. c. downward sloping with a slope of 45 degrees. d. U-shaped with the minimum value equal to zero.
Starting from potential output, if firms become more optimistic about the future and decide to increase their investment in new capital, then this will generate a(n) ________ gap and inflation will ________.
A. expansionary; increase B. expansionary; decrease C. recessionary; decrease D. recessionary; increase
The problem of political instability has been greatest in which continent?
A. South America B. Europe C. Asia D. Africa