When a decrease in the scale of production leads to higher average costs, the industry exhibits
A. increasing returns to scale.
B. constant returns to scale.
C. decreasing returns to scale.
D. diminishing returns.
Answer: A
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An automatic stabilizer: a. increases inflationary pressure during expansions
b. Increases the drop in disposable income during recessions and increases the jump in disposable income during expansions. c. reduces the drop in disposable income during recessions and reduces the jump in disposable income during expansions. d. increases tax revenue relative to government spending throughout the business cycle. e. decreases tax revenue relative to government spending throughout the business cycle.
Spending by consumers on consumption goods, spending by businesses on investment goods, spending by government, and spending by foreigners on net exports make up
a. disposable national income b. the equilibrium economy c. aggregate supply d. aggregate expenditure e. discretionary spending
Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: Cars SoldTrucks SoldLarry105Joe99Ralph312 Based on last month's data, Ralph's opportunity cost of selling a truck is selling:
A. 3 cars. B. 4 cars. C. 1/4 of a car. D. 1/3 of a car.
If no resources had a comparative advantage in the production of any good, the production possibility curve would be:
A. bowed inward. B. a downward-sloping straight line. C. a horizontal line. D. bowed outward.