Economies of scale exist whenever long-run average costs:
A. decrease as output is increased.
B. remain constant as output is increased.
C. increase as output is increased.
D. None of the statements is correct.
Answer: A
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With an increase in income, the consumer will maximize utility on a new indifference curve that represents a higher level of utility
a. True b. False Indicate whether the statement is true or false
According to convergence theory, countries that start out poor should initially grow:
A. faster than ones that start out rich, and will eventually surpass their level of income. B. faster than ones that start out rich, but will eventually slow to the same growth rate. C. slower than ones that start out rich, but will eventually grow to the same growth rate. D. slower than ones that start out rich, and therefore will never reach a similar growth rate.
Refer to the graph shown, which depicts a perfectly competitive firm. To maximize profit, the firm represented will produce:
A. 40 units of output. B. 90 units of output. C. 130 units of output. D. 110 units of output.
A profit-maximizing firm in a competitive market will continue to hire more workers when
A. the marginal factor cost is less than the marginal revenue product of the additional workers. B. the marginal factor cost is less than zero. C. the marginal factor cost equals the marginal revenue product of the additional workers. D. the marginal factor cost exceeds the marginal revenue product of the additional workers.