What is meant by economies of scale and what is the importance of this concept to economic growth?
What will be an ideal response?
Economies of scale are production advantages which are derived from market and firm size. The importance of this concept is that large manufacturers are able to use assembly-line production techniques, to use large-scale efficient equipment, and to take advantage of specialization that cannot be done in small-scale production. This efficiency in production and distribution contributes to growth.
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Which of the following describes the growth in real GDP per person in the United States from 1900 to the present?
A) It has doubled. B) It has decreased. C) It has increased by more than eight times. D) It has increased twenty times.
An initial deficiency in reserves of $20 and a required reserve ratio of .5 lead to a maximum demand deposit contraction of
A) $8. B) $40. C) $50. D) $80.
The present value of $1 payable in the future decreases
a. the higher r is and the sooner it is to be paid. b. the lower r is and the sooner it is to be paid. c. the higher r is and the longer time until it is paid. d. the lower r is and the longer time until it is paid.
If the government's provision of a subsidy is too large to counteract the entire effect of a positive externality, the:
A. quantity consumed will become even lower. B. quantity consumed will become too high. C. total surplus will be maximized. D. None of these statements is true.