Economies of scale occur when the average total cost of producing each individual unit increases as the level of production increases
a. True
b. False
Indicate whether the statement is true or false
False
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If demand is price elastic, then when price decreases, total revenue:
a. decreases. b. increases. c. does not change. d. is less than one. e. is negative.
A good example of central planning at work in the U.S. is:
A. unions working with businesses to establish wages. B. car manufacturers establishing suggested retail prices. C. McDonald's fries being the same everywhere. D. New York City's rent control program.
An example of the moral hazard problem in international investment would be that
A. those seeking the funds are dishonest. B. those seeking funds for the riskiest projects are amongst those most actively seeking the funds. C. government officials may demand higher than the usual amount of bribes. D. the recipients of the funds may use the funds for riskier projects than the approved project.
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary