Economies of scale and Increasing Returns to Scale are the same thing looked at from either the production or cost perspective
Indicate whether the statement is true or false
False. Increasing returns to scale imply economies of scale but the reverse is not true. A firm can experience economies of scale for other reasons (without increasing returns to scale)
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Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. If the government imposes a $250 tax on the sale of drones,
A) Sammy and Dean would not be able to complete the transaction. B) Sammy and Dean would still be able to complete the transaction. C) the tax would cause a deadweight loss of $500. D) Both A and C are correct.
The labor supply curve bends backward because
A. income effects are greater than substitution effects at higher wages. B. substitution effects are greater than income effects at higher wages. C. income effects are greater than substitution effects at lower wages. D. substitution effects are greater than income effects at lower wages.
A demand curve will shift out for any of the following reasons except
a. preference for a good increases. b. price of a substitute falls. c. income rises. d. price of a complement falls.
Economists believe that most individuals act as if they are motivated by self-interest and: a. respond selfishly
b. respond in predictable ways to changing circumstances. c. it leads to inconsistent and unpredictable behavior. d. all of the above.