Minimum efficient scale is defined as
A. the point at which economies of scale are at their maximum.
B. the amount of labor that maximizes the marginal product of labor.
C. the point at which marginal cost, average variable cost, and average fixed cost are all equal.
D. the lowest output level at which long-run average costs are at their minimum.
Answer: D
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For those nations who fixed their currencies' exchange rates to the U.S. dollar, the rise of the dollar during the 90's was very good news,
a. True b. False Indicate whether the statement is true or false
The pure monopolist's demand curve is relatively elastic:
A. in the price range where total revenue is declining. B. at all points where the demand curve lies above the horizontal axis. C. in the price range where marginal revenue is negative. D. in the price range where marginal revenue is positive.
How does Federal Deposit Insurance Corporation (FDIC) cause moral hazard in the banking industry?
A. Depositors do not evaluate the health of a bank when they make a deposit because they are assured that they get their money back. B. Money managers of a bank will make more risky loans because they know that if their investments fail, the government will reimburse the depositors. C. The Federal Reserve (our central bank) does not monitor banks because they know the FDIC covers all deposits. D. Depositors do not evaluate the health of a bank when they make a deposit because they are assured that they get their money back and Money managers of a bank will make more risky loans because they know that if their investments fail, the government will reimburse the depositors are both correct.
Suppose the central bank increases the rate of growth of the money supply. What effect will this increase in money growth have on seignorage in: (1 ) the short run; and (2 ) the medium run? Explain
What will be an ideal response?