When it takes one firm in an industry to produce the quantity necessary to realize low unit costs, the industry
A. experiences economies of scale.
B. has a license granted by the government.
C. has barriers to entry due to ownership of resources.
D. has no barrier to entry.
Answer: A
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Under the rational criminal model, a decrease in the punishment associated with getting convicted will
A. increase crime. B. have no effect on crime. C. increase the caseload in the appellate court system. D. decrease crime.
Suppose the market for coffee is in equilibrium at a price of $5 per pound. This means that:
A. any producer who sells coffee can earn a positive economic profit. B. everyone can afford to buy coffee. C. potential consumers not buying coffee value it at less than $5 per pound. D. potential producers not producing coffee have reservation prices less than $5 per pound.
The 12 Federal Reserve Banks can best be characterized as:
A. central banks, banker's banks, and quasi-public banks. B. investment banks, banker's banks, and public banks. C. national banks, quasi-public banks, and investment banks. D. regional banks, public banks, and member banks.
Refer to Figure 7.1. Which of the following are the combinations of movies and T-shirts that would exhaust the budget?
A. A and E B. C and F C. D and E D. A and G