In an industry, when the cost curve of a firm is upward sloping at low levels of output relative to the market, it implies:
a. the industry is characterized by constant returns to scale.
b. the industry has a high degree of competition.
c. not many firms can operate together in this industry.
d. the firm can charge a price lower than competition and still cover its costs.
B
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USX, a steel company, reduced the number of man-hours required to produce a ton of steel from 10.8 in 1982 to 3.8 in 1990, thereby eliminating 55,000 jobs. Technically, this rise in productivity means the
A. marginal product of labor increased. B. average product of labor increased. C. average product of capital fell. D. marginal product of capital fell.
The transmission mechanism is the effect of changes in monetary policy on the stock market
a. True b. False Indicate whether the statement is true or false
During a period of inflation, the Fed is likely to
a. sell government bonds to banks in order to reduce the amount of loanable funds in the market b. buy government bonds from banks in order to reduce the amount of loanable funds in the market c. raise taxes in order to reduce the money supply d. cut the legal reserve requirement in order to reduce the amount of excess reserves banks have to loan out e. cut the discount rate in order to increase the affordability of loanable funds
In which setting are the transaction costs of making an exchange likely to be the highest?
A) buying cereal at the grocery store B) buying a house C) buying a computer over the Internet D) buying stock in a company E) buying a Big Mac at McDonald's