In a binding situation, the ________ curve is ________.
A. AD; vertical
B. AS; horizontal
C. AS; vertical
D. AD; horizontal
Answer: A
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If a firm experiences economies of scale, then, as output increases,
a. short-run total costs decline b. long-run total costs rises proportionately more than output c. short-run marginal cost must decline d. long-run total cost rises proportionately less than output e. demand increases
The table above shows the total product schedule for Rick's Lawn Service, a yard care company. When does the average product of labor equal the marginal product of labor?
A) between the 4th and 5th workers B) at the 5th worker C) between the 5th and 6th workers D) between the 6th and 7th workers E) between 0 workers and the 3rd worker
The Coase Theorem implies that _____
a. absent transactions costs, resources will be efficiently allocated b. absent transactions costs, resources will be inefficiently allocated c. with significant transactions costs, resources will be efficiently allocated d. with significant transactions costs, resources will be inefficiently allocated
The substitution effect occurs because when the price of one good increases, consumers will buy fewer substitute goods
a. True b. False Indicate whether the statement is true or false