When a producer has the ability to produce a good or service at a lower opportunity cost than others, economists say the producer:
A. has no reason to trade with others.
B. has a comparative advantage at producing that good.
C. has an absolute advantage at producing that good.
D. is efficient in production.
Answer: B
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The main source of economies of scale is
A) better management. B) constant returns to plant size. C) specialization. D) long-run cost curves eventually sloping downward. E) increases in the labor force not matched by increases in the plant size.
In the short-run, a monopoly is most likely to achieve
a. An average rate of return b. Above average profits c. Economic Profits d. Both B&C
When the price of a normal good increases,
a. both the income and substitution effects encourage the consumer to purchase more of the good. b. both the income and substitution effects encourage the consumer to purchase less of the good. c. the income effect encourages the consumer to purchase more of the good, and the substitution effect encourages the consumer to purchase less of the good. d. the income effect encourages the consumer to purchase less of the good, and the substitution effect encourages the consumer to purchase more of the good.
A flow variable is an amount measured at a particular point in time
Indicate whether the statement is true or false