In economic terms, what is the main reason why the standard of living is higher today than it was 100 years ago?
a. Governments have learned how to control the economy.
b. A smaller number of people are living paycheck to paycheck.
c. Sustained economic growth leads to higher living standards.
d. In general, people are living longer, healthier, and happier lives.
c. Sustained economic growth leads to higher living standards.
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As output increases, economies of scale occur when the
A) long-run average cost increases. B) long-run average cost decreases. C) short-run average total cost decreases. D) long-run average cost stays constant. E) long-run fixed cost decreases.
If Big Scoops, a local ice cream parlor, purchases milk from a grocery store to make their ice cream, this is an example of ________.
A) outsourcing B) forward integration C) using a spot market D) backward integration
The use of a price system eliminates: a. scarcity
b. equilibrium. c. shortages and surpluses. d. changes in supply and demand.
In both price-taker and competitive price-searcher markets, the long-run market price of a good will be equal to the
a. average total cost of producing the good. b. average variable cost of producing the good. c. average fixed cost of producing the good plus a normal return on that cost. d. marginal revenue derived from the sale of an additional unit of the good.