The short-run average total cost curve eventually begins to increase at an increasing rate because of
A. increasing returns to scale.
B. economies of scale.
C. diminishing returns.
D. the constraint that the firm cannot change production technologies.
Answer: C
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The imposition of an excise tax on a product will shift that product's ________ curve vertically by the exact amount of the tax. This represents ________.
A. supply; a decrease in supply. B. ?demand; a decrease in demand. C. ?supply; an increase in supply. D. ?demand; an increase in demand.
Define price discrimination. What factors must be present in order for a monopolist to price discriminate? Why do firms price discriminate?
What will be an ideal response?
Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?
A) a decrease in the price of flour B) an increase in the price of rye bread, a substitute for white bread C) an increase in the price of butter, a complement for white bread D) an increase in the price of flour
The real balances effect occurs because a higher price level will reduce the real value of people's:
a. financial assets. b. wages. c. unpaid debt. d. physical investments.