A new domestic industry with a potential for economies of scale is a(n):
A) agglomeration industry.
B) infant industry.
C) monopsonistic industry.
D) competitive industry.
Ans: B) infant industry.
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For the past 15 years the American public has wanted to buy big trucks. The Big Three automakers delivered, investing billions in plants that build gas guzzlers. Now, when customers walk into showrooms, gas mileage is on their mind
Retooling the industry will take years, so in the meantime GM, Ford and Chrysler are tweaking their existing models. They're changing tires, adjusting transmissions and exhaust valves in hopes of getting one or maybe two more miles per gallon. Which of the decisions by the Big Three to gain gas mileage is a short run decision? A) adjusting exhaust valves B) adjusting transmissions C) changing tires D) All of these decisions are short run decisions.
John and Mary work at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario
A) the opportunity cost of decorating a wedding cake for Mary is 4 ice-cream cakes. B) the opportunity cost of decorating a wedding cake for Mary is 1/4 ice-cream cake. C) the opportunity cost of decorating a wedding cake for Mary is 2 1/2 ice-cream cakes. D) the opportunity cost of decorating a wedding cake for Mary is 2/5 ice-cream cake.
Explain the cost advantage of a firm operating at constant returns to scale
Refer to Exhibit 6-2. How many persons are not participating in the labor force in year 3?
a. 50 million b. 100 million c. 150 million d. 350 million e. 400 million