Economies of scale are indicated by
A) declining long-run AVC.
B) declining long-run AFC.
C) declining long-run AC.
D) declining long-run TC.
C
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Which of the following is not true of monopolistic competition?
a. There are a large number of buyers and sellers. b. The firms produce differentiated products. c. There exists free entry and exit of firms. d. Each of the firms faces a horizontal demand curve. e. Each of the firms acts as a mini monopoly in the market.
Samoa could produce either 3 coconuts or 12 pineapples per worker, while Guam could produce either 5 coconuts or 20 pineapples per worker. In this situation: a. if trade occurs, both countries will be able to consume beyond their original production possibilities frontiers. b. Guam will be better off if it exports coconuts and imports pineapples
c. both Samoa and Guam will be better off if Samoa produces both coconuts and pineapples. d. mutually beneficial trade cannot occur.
Suppose a market basket of goods and services costs $400 in the base year and the consumer price index (CPI) is currently 125. This indicates the price of the market basket of goods is now:
A. $275. B. $425. C. $500. D. $525.