A production possibilities frontier that is bowed-inward implies
A) economies of scale.
B) diseconomies of scope.
C) economies of scope.
D) no economies of scope.
B
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The difference between GDP and disposable income is
A) net taxes. B) unplanned investment spending. C) national income. D) actual investment spending.
Explain why an external benefit leads to an under-allocation of resources to the production of a good
What will be an ideal response?
In the long run, monopolistic competitive firms are considered to be operating inefficiently because their
A) economic profits are positive. B) economic profits are zero. C) average total costs are not at a minimum. D) marginal costs are rising.
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
A. $0.13. B. $1.25. C. $8. D. $200.