A firm that has increasing returns to scale in the long run does not experience diminishing marginal returns in the short run.
Answer the following statement true (T) or false (F)
False
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Will, Bill, and Phil decide to study an extra hour for an exam. Instead of studying, they could have gone out to eat, played football, or watched TV. Which of the following statements is correct?
A) The benefit the three students receive must be the same because they all make the same choice. B) The marginal cost of the decision is the same if they make the same score on the exam. C) The students could each have different opportunity costs. D) The students made a rational choice as long as they face no scarcity. E) Going out to eat, playing football, and watching TV are all called sunk costs.
A country has a current account surplus if
A) the value of its exports exceeds the value of its imports, assuming net income from foreign assets and net unilateral transfers have a value of zero. B) the value of its net exports of services exceeds the value of its net exports of goods. C) it receives more income from foreign assets than it pays to foreigners for foreign-owned domestic assets. D) its capital inflows exceed its capital outflows.
If the marginal propensity to consume (MPC) is 0.8, the spending multiplier will be
A) 0.2. B) 1.25. C) 4.0. D) 5.0.
During 2017, the rate of inflation was 2 percent. Daniel sold basketballs that year for $16. If Daniel continued to sell basketballs for the same price in 2018, how did the relative price of basketballs change?
a. –2 percent b. –1 percent c. 2 percent d. 1 percent