Some reasons that firms may experience diseconomies of scale include
a. the firm is too small to take advantage of specialization
b. large management structures may be bureaucratic and inefficient
c. if there are too many employees, the work place becomes crowded and people become less productive
d. having more employees doesn't mean there will be more raw materials to use in production
e. average fixed costs begin to rise again
B
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The figure above shows that monopoly is ________ because it produces a level of output at which ________
A) inefficient; marginal benefit equals marginal cost B) efficient; marginal benefit equals marginal cost C) efficient; marginal benefit exceeds marginal cost D) inefficient; marginal benefit exceeds marginal cost E) efficient; producer surplus is maximized
In the early 19th century, the Russian government sent doctors to southern Russian villages to provide assistance during a cholera epidemic. The villagers noticed that wherever doctors appeared, people died. Therefore, many doctors were chased away from villages, and some were even killed. This reaction to the correlation between doctors and deaths is most likely a problem of
a. omitted variables. b. reverse causality. c. government propaganda. d. medical incompetence.
Taxing interest, dividends, and estates ______ the cost of saving versus consumption.
a. equalizes b. decreases c. increases d. eliminates
Suppose that a firm successfully introduces a highly profitable new product. If this new product offers less marginal utility per unit to consumers than existing substitute products, then the:
A. laws of economics have been violated. B. new product must have increasing, not diminishing, marginal utility. C. existing products were being produced at a loss. D. new product has a lower price than the existing substitute products.