The main sources of economies of scale are
A) increasing marginal cost and decreasing marginal product.
B) specialization of resources such as labor and capital.
C) caused by the difficulty of coordinating and controlling large enterprises.
D) decreasing marginal cost and increasing marginal product.
E) an increase in a firm's bargaining power to lower the wage rate and the cost of capital as the firm's output increases.
B
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According to Hughes and Cain (2011), American economic history is the story of economic growth. Economic growth
(a) necessarily means an improvement in the quality of life for all individuals. (b) does not necessarily measure an improvement in the quality of life; it merely indicates the potential for improvement. (c) as conventionally measured considers an employed person living in the pollution and congestion of modern Tokyo to be "worse off" than a sun-tanned artist watching another glorious sunset on the beach in Tahiti. (d) is measured by the increases in total output of goods and services less any environmental destruction that occurs in the process of production.
Which of the following is not an advantage of user charges?
a. User charges help ration consumption of the taxed good. b. User charges are equitable from the standpoint of the benefit principle of taxation. c. User charges reveal consumer preferences for the taxed good. d. User chargers are easy to apply in cases where the benefits are spread diffusely.
In short-run equilibrium, a perfectly competitive firm
a. may earn a profit or a loss. b. always earns a profit. c. never earns a profit. d. earns a profit only if the firm has no fixed cost.
If a tax cut of 3 percent causes the output supplied to increase by 6 percent, the absolute value of the tax elasticity of supply is
A. 6.0. B. 0.5. C. 18.0. D. 2.0.