Explain why the long-run average cost is typically U-shaped
As firms grow, they can take advantage of mass production economies. However, large firms are more difficult to manage. This eventually causes an upturn in average cost even if there continues to be mass-production economies. Note that the long-run shape has nothing to do with diminishing returns, which is a short-run law.
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Which of the following institutions is not subject to Federal Reserve's reserve requirements?
A) A state-chartered commercial bank B) A savings and loan association C) A money market mutual fund D) A credit union
Which of the following is positively related to income?
a. consumption b. investment c. government expenditures d. all of the above
Which of the following statements correctly defines demand?
a. peoples' willingness to supply goods at specific prices b. the willingness and ability of people to buy goods and services at different prices c. people's expectations of lower prices of goods and services d. producer's expectations of selling more goods e. the interaction of people's willingness to buy and sell goods
The price elasticity of supply at a point is the:
A. change in quantity supplied divided by the change in price. B. change in price divided by the change in quantity supplied. C. percentage change in price divided by the percentage change in quantity supplied. D. percentage change in quantity supplied divided by the percentage change in price.