If a firm increases all of its inputs by 10 percent and its output increases by 15 percent, then:
A. it is encountering diseconomies of scale.
B. it is encountering economies of scale.
C. the law of diminishing returns is taking hold.
D. the firm's long-run ATC curve will be rising.
Answer: B
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Jewelers are willing to hold large inventories of diamonds
a. because the demand for diamonds is large and growing b. because that minimizes the fixed cost of producing diamond jewelry c. because, given monopoly control of the market for diamonds, they are confident that the price of diamonds will not plummet rapidly d. because, given monopoly control of the market for diamonds, they are confident that the price of diamonds will rise rapidly e. because that is what their customers expect them to do
Which category has the highest amount of state and local spending?
a. education b. police c. firefighting d. transportation
How much are the firm's total profits in the graph above?
