If a firm has constant returns to scale, the long-run cost curve will be downward-sloping.
Answer the following statement true (T) or false (F)
False
When there is no economic advantage to a large plant and average costs remain constant with a change in the size of the facility, constant returns to scale exist.
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The cross-price elasticity of demand for generic brand pasta, an inferior good, would be expected to be less than zero
Indicate whether the statement is true or false
The market in which banks lend and borrow reserves from each other for very short periods of time (usually overnight) is the
a. federal funds market b. bond market c. asset based market d. reserve market e. open operations market
A good would not be very suitable to use as money if it
a. is portable because it is needed as a store of value b. is divisible because each unit of money should have the same value c. is scarce because we need more money as the economy grows d. is commonly accepted as a medium of exchange because everyone will hoard it e. lacks uniformity because the money supply would be of varying quality and people will hoard the preferred money and circulate only the less preferred
Ceteris paribus, Real GDP and the unemployment rate are
A) directly related. B) inversely related. C) unrelated. D) directly related when GDP is below its natural level and inversely related when GDP is above its natural level.