The Big Blue Sky jet company has long-run total costs of $20 million if it produces 5 jets and long-run total costs of $24 million if it produces 6 jets. The Big Blue Sky jet company is experiencing
a. economies of scale.
b. constant returns to scale.
c. diseconomies of scale.
d. negative profits.
b
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An increase in the price of labor will, in the short-run, cause a competitive firm's
a. marginal cost to increase, the quantity it sells to decrease and therefore reduce the quantity demand of labor. b. price of its output to increase, leaving demand for labor unchanged. c. marginal revenue product of labor to decrease and therefore reduce demand for labor. d. marginal revenue product of labor to increase and therefore increase demand for labor.
All of the following are reasons a government might choose to protect monopoly rights in an industry except:
A. because it is in the public's interest to do so. B. to encourage innovation. C. to increase consumer surplus beyond what is achieved through competition. D. to benefit insiders.
Regarding increasing productivity, factor mobility is
A. Important in that it helps to fix a stable labor-intensive production process. B. Important in that it helps to fix a stable capital-intensive production process. C. Not important in either a stable or dynamic economy. D. Important in that it helps to reallocate resources in a dynamic economy.
If the exchange rate between the United States and Greece changes from $1 = 1 euro to $1 = 2 euros, then holding everything else constant, the price of U.S. goods in Greece will increase.
Answer the following statement true (T) or false (F)