If a firm has a U-shaped long-run average cost curve,
a. its fixed cost rises as output rises.
b. it must have increasing returns to scale at low levels of production and decreasing returns to scale at high levels of production.
c. it must have increasing returns to each input at low levels of production and decreasing returns to each input at high levels of production.
d. the firm can maximize its output by operating at the point of minimum long-run average cost.
B
You might also like to view...
In the short-run, a temporary increase in the money supply
A) shifts the AA curve to the right, increases output and depreciates the currency. B) shifts the AA curve to the left, increases output and depreciates the currency. C) shifts the AA curve to the left, decreases output and depreciates the currency. D) shifts the AA curve to the left, increases output and appreciates the currency. E) shifts the AA curve to the right, increases output and appreciates the currency.
A war in the Middle-East increases the price of oil. Suppose that the price hike holds. Over what period of time would you expect the largest change in quantity?
A. 1 month B. 1 day C. 1 week D. 1 year
If the average utility of good A is 15 and the average utility of good B is 25, you should:
A. keep consuming the current amounts of both good A and good B. B. realize that you don't have enough information to answer the question. C. consume more of good A and less of good B. D. consume more of good B and less of good A.
A nation's production possibilities curve is bowed out from the origin because:
A. resources are not generally equally efficient in producing every good. B. the originator of the idea drew it this way and modern economists follow this convention. C. resources are scarce. D. wants are virtually unlimited.