A decrease in the long-run average total cost as output increases is due to
A. a declining average fixed cost.
B. externalities.
C. the law of diminishing returns.
D. economies of scale.
Answer: D
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When conducting cost-benefit analysis, it is important to ignore previously incurred costs and previously received benefits
Indicate whether the statement is true or false
If the price of a good increases, ________
A) the budget constraint shifts to the right B) the budget constraint shifts to the left C) the consumer surplus increases D) the consumer surplus decreases
A linear demand for lake front cabins on a nearby lake is estimated to be: QD = 900,000 - 2P. What is the point price elasticity for lake front cabins at a price of P = $300,000? [HINT: Ep = (?Q/?P)(P/Q)]
a. EP = -3.0 b. EP = -2.0 c. EP = -1.0 d. EP = -0.5 e. EP = 0
The foreign purchases effect suggests that a decrease in the American price level relative to those in other countries will
A. shift the aggregate demand curve leftward. B. shift the aggregate supply curve leftward. C. decrease American exports and increase American imports. D. increase American exports and decrease American imports.