If unit costs remain constant as the quantity of production increases and all inputs are variable, then a firm is experiencing
A) constant returns to scale.
B) economies of scale.
C) diseconomies of scale.
D) falling economies of scope.
A
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Which of the following is part of the economic way of thinking? a. When an option becomes less beneficial, individuals will become more likely to choose it. b. Costs are incurred whenever scarce resources are used to produce goods or services
c. The value of a good is determined by its cost of production. d. Both a. and b. are part of the economic way of thinking.
When (if at all) are budget deficits inflationary?
a. when AS is perfectly horizontal b. when AS has a very steep slope c. when AS has a downward slope d. when AS intersects AD
The advantage of a system of fixed exchange rates over one where exchange rates are flexible is that
A. the government gains more control over the economy. B. floating exchange rates impose risks on importers and exporters from unpredictable exchange rates. C. exchange controls become unnecessary. D. fiscal and monetary policy can focus more on domestic conditions.
Refer to the diagram. Assume that G and T 1 are the relevant curves, the economy is currently at B, and the full-employment GDP is A. This economy has a(n):
A. cyclically adjusted budget surplus.
B. actual budget deficit.
C. cyclically adjusted budget deficit.
D. actual budget surplus.