The principle that the opportunity cost increases as the production of one output expands is the:
a. law of demand.
b. law of increasing opportunity costs.
c. law of increasing returns to scale.
d. law of supply.
b
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Indicate whether the statement is true or false
Refer to Table 9-11. Which country has a comparative advantage in producing hats?
A) Denmark B) Belize C) both countries D) neither country
Discuss the effects of the reunification of eastern and western Germany in 1990 on both Germany and its neighboring European countries
What will be an ideal response?
Suppose that a firm produces both steel and electricity. It is cheaper for this firm to produce both goods than it would be if they were produced by two separate firms. Further, as this firm increases its production levels of both products, the average cost of producing steel rises, while the average cost of producing electricity remains constant. This firm experiences:
A. economies of scope, diseconomies of scale in the production of steel and constant returns to scale in the production of electricity. B. economies of scope, economies of scale in the production of steel and constant returns to scale in the production of electricity. C. diseconomies of scope, economies of scale in the production of steel and constant returns to scale in the production of electricity. D. diseconomies of scope, diseconomies of scale in the production of steel and increasing returns to scale in the production of electricity.