The following table shows short-run average total cost schedules for three plants of different sizes that a firm might build in the long run.Plant 1Plant 2Plant 3OutputATCOutputATCOutputATC10$1010$1510$20209201020153083073010409401040850105014509If the three plant sizes shown are the only ones possible, then there are economies of scale in producing up to ________ units of output, and diseconomies of scale after that.
A. 10
B. 20
C. 30
D. 40
Answer: C
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When does a firm's average variable cost exceed the average total cost?
A. never B. when the average variable cost is at its minimum C. when the average fixed cost is at its minimum D. when the average total cost equals the average fixed cost
The Laffer curve illustrates that:
A. high tax rates could lead to lower tax revenues if economic activity is severely discouraged. B. lowering tax rates will always increase tax revenues. C. high tax rates would increase tax revenue and increase the labor supply as people work harder to maintain their standard of living. D. lowering tax rates will always decrease tax revenues.
When the price of a pizza is $10, the quantity of soda demanded is 300 drinks. When the price of a pizza is $15, the quantity soda demanded is 100 drinks. The cross elasticity of demand is equal to
A) -0.25. B) -0.40. C) -2.50. D) -25.00. E) 4.00.
In 2011, a number of Canadians purchased homes in Arizona. Which of the following would not be a logical explanation for this?
A) The value of the Canadian dollar relative to the U.S. dollar increased during this time. B) The U.S. dollar appreciated relative to the Canadian dollar during this time. C) The Canadian dollar appreciated during this time. D) The U.S. dollar depreciated during this time.