Which of the following reflects diseconomies of scale?
a. Marginal product decreases as output increases.
b. Short-run marginal cost increases as output increases.
c. Long-run marginal cost increases as output increases.
d. Short-run average cost increases as output increases.
e. As output doubles, long-run total cost more than doubles.
E
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Which of the following components of aggregate expenditure is most subject to crowding out?
a. Consumption expenditures b. Investment spending c. Imports d. Government purchases of goods and services e. National saving
Most economists agree that the best way to evaluate policy is to:
A. know whether the intentions behind the policy were good intentions. B. learn if the policy can be determined through a democratic political process, not simply imposed by a bureaucracy. C. compare the actual benefits of the policy with the actual costs. D. determine whether the public thought that the government had done all it could do to solve the problem.
Because every policy change generates winners and losers, loss aversion generates:
A. status quo bias. B. anchoring and adjustment. C. fungibility. D. regression to the mean.