Answer the following statements true (T) or false (F)
1. When average costs are increasing, marginal costs are greater than average costs.
2. If a firm increases all its inputs by 10 percent and its output increases by 15 percent, the firm is experiencing diseconomies of scale.
3. A major factor explaining economies of scale is increased specialization of labor.
4. Diseconomies of scale are caused by the law of diminishing marginal returns.
5. If a firm doubles its resource inputs and as a result output triples, then the long-run average cost curve must be upward-sloping.
1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. FALSE
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Match each of the following jobs to its major area: forecasting, analysis, research, or data development. Explain your answers
(a) Economist at university, testing theories about the efficient allocation of resources in the foreign exchange market (b) Economist at Wall Street firm trying to predict the rate of inflation next year using past data (c) Economist at auto firm looking at demand for new automobiles (d) Economist at the International Trade Commission trying to determine whether foreign firms are dumping goods in the United States (e) Economist at the Commerce Department developing new methods for calculating price indexes (f) Economist consulting in Eastern Europe about how to set up free-market financial systems
The minimum value of the Herfindahl-Hirschman Index (HHI) is ________ and the maximum value is ________.
A) 0; 10,000 B) 100; 1,000 C) 100; 10,000 D) 1; 1,000
Estimations of demand are used as input in this type of scenario:
A. understanding automobile demand to decide whether to offer below-market-rate loans for new cars. B. as input into a firm's decision-making process. C. understanding the demand for oil in order to impose a new oil import tax. D. all of the above
Which of the following is definitely true when nominal GDP increases?
A. The standard of living improves. B. The amount of output increases. C. The value of output increases. D. The production possibilities curve shifts outward.