Which economic concept explains why a large drugstore chain can produce at a lower average cost than Whoville Pharmacy, an individually owned drugstore?
a. increasing marginal returns
b. diminishing marginal returns
c. economies of scale
d. diseconomies of scale
e. constant returns to scale
C
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Market activity differs from government activity because
a. markets generally force prices to below-cost levels b. governments never charge for the services they provide c. markets do not use voluntary exchange mechanisms d. markets provide a direct link between benefits and costs e. governments have strong incentives to keep costs under strict control
Figure 5-13
In Figure 5-13, the consumer can afford any combination of X and Y represented by a point
a.
on line AB only.
b.
on or below line AB.
c.
on or above line AB.
d.
anywhere on the graph.
A resource is something that _____
a. is used to produce goods and services. b. is provided by nature, and not produced by society. c. exists in unlimited quantities in developed countries. d. must be produced by a firm. e. is always available free of cost.
During the 1960s, U.S. steel firms argued they needed tariff protection because Germany and Japan were using new mills to make steel since their old mills were destroyed in World War II. Essentially, this argument is a form of the
A. infant-industry argument. B. countering foreign subsidies argument. C. anti-dumping argument. D. national defense argument.