Constant returns to scale refers to when:
A. an increase in the quantity of output decreases average total cost in the long run.
B. an increase in the quantity of output increases average total cost in the long run.
C. average total cost does not depend on the quantity of output in the long run.
D. None of these is true.
C. average total cost does not depend on the quantity of output in the long run.
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This method of financing government spending is frequently called printing money because high-powered money (the monetary base) is created in the process
A) financing government spending with taxes B) financing government spending through a Treasury sale of bonds that are then purchased by the Fed C) financing government spending by selling bonds to the public, which pays for the bonds with currency D) financing government spending by selling bonds to the public, which pays for the bonds with checks
If the government's provision of a subsidy is too large to counteract the entire effect of a positive externality, the:
A. total surplus will be maximized. B. quantity consumed will become even lower. C. quantity consumed will become too high. D. None of these statements is true.
If a firm's average total cost is less than price where MR = MC
A) the firm should shut down.
B) the firm should cut back on its output to lower its cost.
C) the firm should continue to produce the output it is producing.
D) the firm should raise its price.
A monopolist faces a downward-sloping demand curve because:
A. the demand for its product is inelastic. B. the industry demand curve is horizontal. C. resource prices increase as the monopolist expands output. D. the entire market demand curve is the monopolist's demand curve.