When a firm experiences declining long-run average total costs as it produces more output, there are
A) increasing marginal returns to variable inputs.
B) economies of scale.
C) diseconomies of scale.
D) constant returns to scale.
Answer: B
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In the figure above, what is the marginal social benefit of the 3,000,000th CD per month?
A) $11.00 per CD B) $8.00 per CD C) $6.00 per CD D) None of the above answers is correct.
Potential GDP is the maximum output a firm is capable of producing
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. The poverty rate for female householders without a husband present exceeds the poverty rate for blacks and Hispanics. 2. The biggest disincentive to employment for those on welfare is the effect of taxes as they earn income. 3. For many welfare recipients, taking a job reduces income. 4. As incomes rise, transfer benefits to the poor decrease. 5. A minimum wage rate job raises a family out of poverty.
A liquidity trap occurs when
A. the demand for loans increases in a country on the gold standard, so that the monetary supply is not able to increase and interest rates rise dramatically. B. any additions to the monetary base are held as cash by people or reserves at banks. C. there are runs on banks that are solvent but illiquid. D. the Fed increases the money supply, causing the expected inflation rate to rise more than the real interest rate declines, so that the nominal interest rate increases.