In the circular flow model, households:
a. Buy products and sell resources
b. Sell products and buy resources
c. Buy products and resources
d. Sell products and resources
Answer: a. Buy products and sell reources
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Generally there is an inverse relationship between the level of savings and the level of long-term economic growth
a. True b. False Indicate whether the statement is true or false
In monopolistic competition, product differentiation causes
a. the firms to earn economic profits in the long run b. a horizontal demand curve for each firm's output c. the firms to operate with excess capacity d. significant barriers to entry e. high concentration ratios
Chloe's Café sells gourmet cinnamon rolls. In the long run, the café incurs a total cost of $500 to produce 1,000 cinnamon rolls. If Chloe's Café exhibits constant returns to scale between 1,000 and 1,500 cinnamon rolls, the long-run average total cost for 1,250 cinnamon rolls is a. higher than $0.50. b. lower than $0.50. c. equal to $0.50
d. equal to $500.
If an economy maintains a small rate of growth for a long period of time, then the size of the economy:
A. can only increase by a small amount. B. will stay nearly constant. C. can increase by a large amount. D. can never double.