Economies of scale refer to the range of output over which
A) marginal cost exceeds average cost.
B) the long-run average cost falls as output increases.
C) the marginal product of labor diminishes.
D) the long-run average cost is less than the short-run average total cost.
B
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Suppose Joan uses her savings to purchase computer equipment for her new consulting business. Soon after this, the market interest rate rises. As a result, her
a. explicit costs rise immediately b. accounting profit falls immediately c. accounting profit rises immediately d. economic profit rises immediately e. economic profit falls immediately
When each country specializes in producing the good for which it has a comparative advantage:
A. both countries may benefit. B. both countries always enjoy equal gains from trade. C. the country that is bigger will gain more surplus. D. the country with the weaker economy will gain more surplus.
An aggregate demand curve can be drawn by: a. shifting the 45-degree line
b. letting changes in autonomous spending shift the aggregate expenditure line. c. letting changes in the price level shift the aggregate expenditure line. d. letting changes in the level of income shift the aggregate expenditure line. e. letting changes in real GDP shift the aggregate expenditure line.
Assume the United States and Canada have the same amount of resources. In a given time period, the United States can produce 3 tons of steel or 300 tons of wheat. Canada can produce 4 tons of steel or 400 tons of wheat. This means that
A. The United States has a comparative advantage in steel. B. Canada has an absolute advantage in both steel and wheat. C. Canada has a comparative advantage in steel. D. The United States has an absolute advantage in steel.