When carmakers began to cut the costs of producing cars by designing the chassis, engines, and transmissions so that different models could be produced on the same assembly line, production costs fell $240 per car. This idea best illustrates:
A. diminishing marginal product.
B. diseconomies of scale.
C. economies of scale.
D. constant returns to scale.
Answer: C
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Profitable investment is most effectively promoted when:
a. the money supply and price level are stable. b. inflation is rising rapidly c. monetary policy is unanticipated. d. persistent inflation increases uncertainty.
Marginal physical product measures the increase in total output that results from a one-unit increase in an input
a. True b. False Indicate whether the statement is true or false
To efficiently manage traffic on a system of bridges,
a. the more-crowded bridges should have lower tolls, so that they are affordable. b. the tolls should be equal for all bridges, so that people can choose the most convenient routes. c. tolls should be higher on more-crowded bridges and lower on less-crowded bridges. d. there should be no tolls on bridges, because people should not have to pay to drive to their jobs.
A person's incentive to spend additional money on conspicuous consumption goods will be ________ to the amount and reliability of independent information that people have about his abilities.
A. inversely related B. equal C. positively related D. unrelated