Diseconomies of scale arise primarily because:
A. the short-run average total cost curve rises when marginal product is increasing.
B. of the difficulties involved in managing and coordinating a large business enterprise.
C. firms must be large both absolutely and relative to the market to employ the most efficient
productive techniques available.
D. beyond some point marginal product declines as additional units of a variable resource
(labor) are added to a fixed resource (capital).
Answer: B
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As an economic expansion approaches its peak, it is very likely that real GDP will
A) exceed nominal GDP. B) exceed potential GDP. C) equal nominal GDP but not potential GDP. D) be less than potential GDP. E) equal nominal GDP and equal potential GDP.
If the GDP deflator in the United States is 114, and the GDP deflator in Ukraine is 142, which of the following changes would the theory of purchasing power parity predict? (The Ukrainian currency is the hryvnia.)
A) The demand for the dollar will fall since the dollar is overvalued. B) The demand for the dollar will rise since the dollar is undervalued. C) The supply of the dollar will fall since the dollar is undervalued. D) No prediction regarding changes in the demand or supply of the dollar can be made without information on the exchange rate between the United States and Ukraine.
Fifty-five delegates from seven states convened at the first Constitutional Convention (1787) to determine whether the central government of the new, independent country should modify its rules and regulations to permit more or less state
sovereignty. Indicate whether the statement is true or false
Ashley is an attorney and also an excellent typist. She can type 120 words per minute, but she charges attorney fees at $100 per hour. Benjamin would like some typing work but can only type 60 words per minute. According to the law of comparative advantage, Ashley should hire Benjamin to do her typing if and only if his wage rate is less than
a. $10 per hour. b. $50 per hour. c. $60 per hour. d. $100 per hour.