When per-unit output costs fall as output increases, this is called:
A. economies of scope.
B. economies of scale.
C. learning by doing.
D. diminishing marginal returns.
Answer: B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Leaving open-access resources open to all people but restricting the intensity of the use of the resources assigns
A) permanent property rights to the government. B) temporary property rights to those people given permission to use the resource. C) property rights to no one since the intensity of the use of the resource has been restricted. D) property rights to everyone since the resource is available to be used by everyone.
Which president said, "Prosperity is just around the corner"?
A) Herbert Hoover near the start of the Great Depression B) Franklin Delano Roosevelt near the start of the Great Depression C) George W. Bush near the start of the Great Recession D) Barack Obama near the start of the Great Recession
The economy moves up a stationary aggregate demand curve when the Fed:
A. decreases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function. B. increases its target inflation rate, reflected by a downward shift in the Fed's policy reaction function. C. decreases its target inflation rate, reflected by an upward shift in the Fed's policy reaction function. D. increases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.