How can diseconomies of scale occur at larger capacities?
What will be an ideal response?
Answer: Increasing plant size and labor force can remove the management from the actual production process and all decisions for plans cannot be made by one person. Thus communication and cooperation problems can result as a group of people must work to make production decisions. This can also slow the decision making process to the point that consumer tastes and technological changes are not incorporated into decisions.
Expansion can affect workers' productivity as well. Workers can feel more removed from their bosses and thus more likely to shirk. To counteract this, more supervision may be necessary, increasing production costs.
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Assume there is an increase in the price of electricity (which is the result of a decrease in the supply of electricity), and electricity and natural gas are substitutes
How would this affect the demand for natural gas, and what would happen to the equilibrium price and quantity of natural gas?
Monetizing the deficit contributes to the inflationary pressures that are already present in the economy
a. True b. False Indicate whether the statement is true or false
This year Terrance earned $3,000 more than last year. As a result, he received $2,500 less in government transfers. Therefore, Terrance's implicit marginal tax rate is about
a. 16 percent b. 25 percent c. 66 percent d. 83 percent
If income were equally distributed, a nation's Lorenz curve would be identical to the _______________.
Fill in the blank(s) with the appropriate word(s).