Diseconomies of scale mean that:
A. the advantages of specialization are being more fully realized.
B. a firm's long-run average total cost curve is rising.
C. a firm's long-run average total cost curve is declining.
D. a given increase in inputs results in a more-than-proportionate increase in output.
Answer: B
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The marginal propensity to consume describes ________
A) the tendency to consume fringe, or unusual items B) the impact of a change in spending on income C) the impact on consumption resulting from a change in income D) lifetime consumption resources
When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,
a. consumer surplus increases and total surplus increases in the market for that good. b. consumer surplus increases and total surplus decreases in the market for that good. c. consumer surplus decreases and total surplus increases in the market for that good. d. consumer surplus decreases and total surplus decreases in the market for that good.
If the MPC is 0.6, and the government increases its spending by $300b, the overall effect on GDP will be:
A. a decrease of $750b. B. a decrease of $550b. C. an increase of $750b. D. an increase of $250b.
Suppose a capital-abundant large country experiences a significant increase in its capital stock. This change in endowments is most likely to lead to
A. an improvement in the country's terms of trade. B. no change in the price of the labor-intensive good relative to the price of the capital-intensive good. C. an increased willingness to trade. D. a decreased willingness to trade.