Everything else equal, the AC curve will shift when
A. the price of the product rises.
B. technological change raises the MPP of one input.
C. output rises.
D. increasing returns to scale are present.
Answer: B
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Suppose the interest rate which banks in Techland charge each other for overnight loans is 5%, the long-run nominal interest rate is 4.5%, and the long-run expected inflation rate is 3%
i) What is the long-run expected real interest rate? ii) How will the long-run expected real interest rate be affected if the central bank of Techland starts purchasing government bonds from banks?
Under monopoly
a. too small a share of society's resources is used to produce the monopolized commodity. b. Adam Smith's invisible hand assures efficient resource allocation. c. too large a share of society's resources is being used to produce the monopolized commodity. d. MC > MU.
Suppose a monopolist has positive fixed costs and constant marginal costs. If the government regulates a monopoly's price to marginal cost, in the long run:
A. the monopolist will earn a profit if ATC > MC. B. the monopolist will earn a profit if ATC > P. C. the monopolist will exit the industry. D. the monopolist will earn zero profits.
A geometric representation of the distribution of income is referred to as
A) the labor supply curve. B) the Lorenz curve. C) the Phillips curve. D) the Keynesian cross.