In the long run a company that produces and sells covers for cell phones incurs total costs of $2,500 when output is 1,250 covers and $4,000 when output is 1,500 covers. For this range of output, the cell phone cover company exhibits
a. economies of scale.
b. constant returns to scale.
c. diseconomies of scale.
d. efficient scale.
c
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While hurricane Katrina severely disrupted the normal flow of economic activity in the Gulf Coast States in 2005, in the periods following the hurricane
a. the price level fell below 100 b. unemployment in the U.S. spiked c. aggregate demand increased, sparked by the need for reconstruction d. real GDP fell to 1980's levels e. imports rose dramatically
Your bike is worth $100 and if you park it outside at school there is a 25% chance that it will be stolen. Your utility function for money is U = (M)2. Assume throughout that the bike value and money are interchangeable since you could sell the bike instantly at its value if necessary. Campus security has a bike check in that will guard your bike for $15 so there will be no risk of loss. Do you take the campus security deal?
What will be an ideal response?
Relative to standard competitive trade, trade based on monopolistic competition has ________ impact on relative factor incomes.
A. no B. lower C. the same D. greater
Explain the equimarginal rule.
What will be an ideal response?