If a firm experiences economies of scale as it expands production, then:
a. it is not subject to diminishing returns.
b. its marginal cost curve will be downward sloping in that range.
c. its marginal product curve will be downward sloping in that range.
d. its long-run average total cost curve will be downward sloping in that range.
Ans: d. its long-run average total cost curve will be downward sloping in that range.
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A) perfect complements. B) unrelated. C) perfect substitutes. D) not desirable.
Assume the economy is in a recession and the Federal government decides to cut personal income tax rates. All else equal, the cut in tax rates should
A) increase consumption expenditures and cause real GDP to increase relative to potential GDP. B) increase the nominal interest rate and cause potential GDP to increase relative to real GDP. C) decrease the real interest rate and decrease expectations of inflation. D) increase the target interest rate and cause real GDP to fall relative to potential GDP.
Although there are barriers to entry in a monopolized industry, there are usually many close substitutes for the monopolist's product
a. True b. False
On balance, markets do some things very well, and some things poorly
a. True b. False Indicate whether the statement is true or false