Assume a given amount of output can be produced by several small plants or one large plant with identical minimum per-unit costs. This long-run situation reflects the existence of
A. Diminishing returns.
B. Constant returns to scale.
C. Economies of scale.
D. Diseconomies of scale.
Answer: B
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Holding other factors constant, a technological improvement that increases the marginal product of capital will:
A. decrease national saving. B. decrease investment. C. increase investment. D. increase national saving.
Economics is:
a. concerned with the problem of scarce resources combined with unlimited wants. b. the study of how to make money in the stock market. c. highly theoretical and has little practical application. d. primarily concerned with day-to-day business decision making. e. a decision making process involving individuals and firms rather than governments.
Suppose that the equilibrium interest rate is 8 percent, but the actual interest rate is 5 percent. Very quickly,
a. bond prices fall b. bond prices will rise c. the interest rate will begin to fluctuate until bondholders reduce their demand for money d. the primary bond market will start its adjustment process e. the supply and demand for money will both increase
Which of the following will decrease the demand for labor in the fast-food hamburger industry?
a. a decrease in the cost of producing the hamburgers, e.g., lower wage rate b. the price of pizza, a substitute for hamburgers, decreases c. the price of pizza, a substitute for hamburgers, increases d. more advanced technology is used in making fast-food hamburgers e. the price of hamburgers increases