Economic efficiency definitely occurs whenever
A) a firm cannot increase its output without increasing all its inputs.
B) there are no implicit costs.
C) the most modern technology is used in the production process.
D) the firm produces a given output at the least cost.
D
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If the market for a product is narrowly defined, then there are likely to be many substitutes for the product and the demand for the product is relatively elastic
Indicate whether the statement is true or false
Suppose a gardener produces both tomatoes and squash in his garden. If the opportunity cost of one bushel of squash is 2/5 bushel of tomatoes, then the opportunity cost of 1 bushel of tomatoes is
a. 2/5 bushel of squash. b. 5/2 bushels of squash. c. 2 bushels of squash. d. 5 bushels of squash.
Deregulation of the airline and trucking industry has (i) resulted in considerable entry of new firms or (ii) has forced workers in these industries to make large concessions on wages and working conditions.
A. i and ii B. i but not ii C. ii but not i D. neither i nor ii
The interest rate effect and real wealth effect are important because they help to explain
A. why demand management policy cannot be used effectively when aggregate supply shifts to the left. B. the downward-sloping nature of the aggregate demand curve. C. why equilibrium real GDP rarely coincides with potential real GDP. D. why the aggregate demand curve may shift inward or outward.