Which of the following is not a reason why firms experience economies of scale?
A) Technology can make it possible to increase production with a smaller increase in at least one input.
B) Workers and managers can become more specialized, enabling them to be more productive.
C) Larger firms may be able to purchase inputs at lower costs than smaller competitors.
D) As output increases, the managers can begin to have difficulty coordinating the operations of their firms.
Answer: D
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A Groves mechanism is a procedure for setting the level of a public good that:
A. induces everyone to report their preferences correctly. B. induces everyone to overstate the benefit they receive from a public good. C. induces everyone to understate the benefit they receive from a public good. D. only works if the public good in question is free of externalities.
Which of the following will increase the velocity of circulation?
a. Interest rates increase. b. The inflation rate decreases. c. Federal banking legislation abolishes credit cards. d. Employers decide to pay employees once a month instead of once a week.
The study of how people choose among the alternatives available to them is the:
A) definition of economics. B) model of demand. C) theory of opportunity costs. D) method of distinguishing between microeconomics and macroeconomics.
Refer to the accompanying figure.
Starting from long-run equilibrium at point C, a favorable inflation shock that decreases inflation from ? to ?1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. B; C B. A; B C. B; A D. A; C