When an increase of a firm's scale of production leads to higher average costs per unit produced, there is an increasing return to scale.
Answer the following statement true (T) or false (F)
False
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Median household income in the United States has increased from $38,771 in 1967 to $51,017 in 2012. Based only on this fact, we can conclude that
A) Inequality is increasing in the United States. B) Inequality is decreasing in the United States. C) Inequality is not changing in the United States. D) We cannot conclude anything about inequality in the United States without more information.
In response to a temporary change in total factor productivity, the adoption of capital controls under a flexible exchange rate
A) amplifies the effect of this disturbance on both domestic output and the nominal exchange rate. B) amplifies the effect of this disturbance on domestic output and dampens the effect on the nominal exchange rate. C) dampens the effect of this disturbance on domestic output and amplifies the effect on the nominal exchange rate. D) dampens the effect of this disturbance on both domestic output and the nominal exchange rate.
Monopolistically competitive firms use product differentiation to increase the price elasticity of demand
a. True b. False
The simpler a production process is,
a. the greater the cost of production b. the greater the transaction cost of using markets c. the more likely a firm will use the market to organize production d. the more likely a firm will used centralized control to organize production e. the more likely that transaction costs increase by using centralized control of production