The long-run average cost curve connects the lower part of the short-run cost curves because:
A) prices of inputs are less when acquired for a longer time period.
B) in the long run, firms have more flexibility to change input combinations.
C) specialization of inputs increases productivity only in the long run.
D) the firms earn positive profits in the long run.
B
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A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:Production Possibilities ScheduleProductABCDEFSteel012345Wheat100907555300Which of the following output-combinations is unattainable?
A. 4 units of steel and 55 units of wheat B. 95 units of wheat and 0 units of steel C. 30 units of wheat and 3 units of steel D. 1 unit of steel and 80 units of wheat
The NBER's Business Cycle Dating Committee defines a recession as at least two consecutive quarters of falling real GDP
Indicate whether the statement is true or false
Suppose in Finland a worker can produce either 32 cell phones or 4 kayaks while in Canada a worker can produce either 40 cell phones or 10 kayaks
a. Which country has an absolute advantage in cell phone production? In kayak production? b. What is the opportunity cost of 1 cell phone in Finland? In Canada? c. What is the opportunity cost of 1 kayak in Finland? In Canada? d. Which country has a comparative advantage in cell phone production? In kayak production? e. Suppose each country has 1,000 workers. Currently, each country devotes 40 percent of its labor force to cell phone production and 60 percent to kayak production. What is the output of cell phones and kayaks for each country and what is the total output of cell phones and kayaks between the two countries? f. Suppose each country specializes in the production of the good in which it has a comparative advantage. What is the total output of cell phones and kayaks in the two countries? g. Provide a numerical example to show how Finland and Canada can both gain from trade. Assume that the terms of trade are established at 6 cell phones for 1 kayak.
Father says, "Earn a B-average on your next report card and I'll help you buy a car." An economist would say that this parent is providing his child a(n)
A) study disincentive. B) reason to slack off and not worry about her grades. C) bribe. D) incentive.