Why do economies of scale and learning curve effects look similar when they are graphed? What different concepts do they represent?
What will be an ideal response?
A graph of economies of scale shows that average costs per unit of output fall when the quantity of output increases. However, this decrease in the average cost per unit of output occurs at a decreasing rate. Economies of scale show the cost advantages larger firms have in some industries, like basic metals, where costs per unit fall with the cumulative volume of output. A graph of a learning curve shows that average costs per unit of output fall when the cumulative quantity of output produced since inception increases. This decrease in the average cost per unit of output occurs at a decreasing rate. Learning curves show the cost advantages firms that have cumulatively produced greater amounts of output have in some industries such as semiconductors.
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Refer to Figure 18.7 below. The intercept point N is actually found by I 1 + I 0 (1 + r). The intercept point M is calculated by I 0 + I 1 /(1 + r). Show that the slope of the budget constraint is indeed 1-r| .
Which statement is true?
A. In both the 19th century and the since the 1980s we borrowed from foreigners to finance both capital expansion and consumption. B. In neither the 19th century nor since the 1980s we borrowed from foreigners to finance both capital expansion and consumption. C. In the 19th century we borrowed from foreigners to finance capital expansion and since the 1980s we borrowed to finance consumption. D. In the 19th century, we borrowed from foreigners to finance consumption and since the 1980s we borrowed to finance capital expansion.
Economic freedom is a precondition for economic growth. Which of the following is a characteristic of economic freedom?
i. A democratic form of government ii. Property rights must be protected. iii. The government must support and pay for inventions and innovations. A) i only B) ii only C) Both ii and iii D) Both i and ii E) Both i and iii
When will an increase in aggregate demand not result in lower unemployment rates in the short run?
What will be an ideal response?