If a farmer produces 1000 bushels of corn using ten acres of land and one tractor and is able to produce 2000 bushels of corn using twenty acres of land and one tractor, the farmer has
A) increasing returns to scale.
B) constant returns to scale.
C) decreasing returns to scale.
D) no returns to scale.
A
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An economic model:
A. exactly explains what happens in the real economy. B. approximates all facets of what happens in the real economy. C. does not make clear assumptions about the economic activity. D. discards unnecessary details to clearly demonstrate the central principles of the economic activity.
Growth is advantageous to a nation because it
A. slows the growth of wants. B. eliminates the economizing problem. C. promotes faster population growth. D. lessens the burden of scarcity.
The effects of a price change are always understated by a partial-equilibrium analysis when compared to a general-equilibrium analysis
Indicate whether the statement is true or false
If the value of net exports is positive, then
A. exports equal imports. B. exports exceed imports. C. imports exceed exports. D. imports are zero.