Which of the following physical relationships might generate economies of scale?
A) Proportionally larger pipes can transport more than a proportional increase in oil.
B) Larger equipment tends to weigh more and use more fuel on a per-unit-of-output basis.
C) Each lift truck requires one lift truck driver.
D) A doubling of all inputs leads to a doubling of output.
Answer: A
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In popular usage the term investor is used to refer to
a. a speculator in futures markets. b. a buyer of risky assets. c. an entrepreneur who purchases machinery and equipment to expand production. d. individuals whose primary source of income is from returns on financial assets.
This graph reflects a Keynesian viewpoint. How would the economy respond to an aggregate demand increase under the classical model?
a. The economy would quickly adjust to a new point of long-run equilibrium where AD2 intercepts LRAS.
b. The shift from AD1 to AD2 would produce a short-run equilibrium point at e2 that differs from E1.
c. The economy would quickly adjust to a new point of long-run equilibrium where AD1 intercepts LRAS.
d. The shift from AD1 to AD2 would also shift LRAS rightward to a new position at RGDP2.
The purpose of expansionary fiscal policy is to
a. increase output b. prevent hyperinflation c. slow the growth of the GDP d. increase the separation between government and private industry
Which of the following would best explain why regulatory capture is a problem?
A. The regulations implemented tend to reduce the profitability of the regulated industry and reduce global competitiveness. B. Regulatory capture unduly increases the size and power of government, increasing costs for taxpayers. C. Individuals implementing the regulations lack expertise about the industry and therefore make poor regulatory choices. D. The regulations implemented serve the private interests of the regulated industry, rather than addressing social interests such as consumer safety and environmental protection.