If output changes in fixed proportion to a change in all of a firm’s productive resources, the firm has
a. constant marginal returns.
b. constant returns to scale.
c. decreasing marginal returns.
d. decreasing returns to scale.
b. constant returns to scale.
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The reason we are willing to accept money with no intrinsic value is that
A) the money supply is backed by an equal amount of gold and silver. B) we have a fiduciary monetary system in which currency has both acceptability and predictability of value. C) the value of the money varies directly with changes in the price level. D) paper currency may be exchanged for full-bodied money.
Which economist created the theory of creative destruction?
A. William Nordhaus B. Joseph Schumpeter C. Adam Smith D. Milton Friedman
What condition may provide for a relatively small degree of inefficiency under monopolistic competition?
A) There is a single seller and no product differentiation. B) The marginal cost of production is less than the market price. C) The demand curve is relatively elastic so that the price is near the long-run minimum average cost. D) There is only one buyer in the market.
In year 1 the CPI is 140, and in year 2 the CPI is 154. From year 1 to year 2, Marcy's salary rises from $43,000 to $48,000, and Daphne's salary rises from $65,000 to $70,000. Who is "more than keeping up with inflation"?
a. Marcy b. Daphne c. both Marcy and Daphne d. neither Marcy nor Daphne