Diseconomies of scale occur when
A) long-run average costs rise as a firm increases its output.
B) long-run average costs fall as a firm expands its plant size.
C) short-run average costs rise as a firm expands its plant size.
D) long-run labor costs rise as a firm increases its output.
Answer: A
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Indifference curves are convex to the origin because of:
A) transitivity of consumer preferences. B) the assumption of a diminishing marginal rate of substitution. C) the assumption that more is preferred to less. D) the assumption of completeness. E) none of the above
Scarcity means
a. unlimited wants and unlimited available resources. b. unlimited wants and limited available resources. c. limited wants and limited available resources. d. limited wants and unlimited available resources.
Export promotion policies try to encourage firms to produce more of the products for which the country has a comparative advantage.
Answer the following statement true (T) or false (F)
The economy is in a recession. The government enacts a policy to increase spending by $2 billion. The MPS is 0.2. What would be the full increase in real GDP from the change in government spending assuming that the aggregate supply curve is horizontal across the range of GDP being considered?
A. $6 billion B. $8 billion C. $10 billion D. $16 billion