When a firm experiences declining long-run average total costs as it produces more output, there are
A. increasing marginal returns to variable inputs.
B. diseconomies of scale.
C. constant returns to scale.
D. economies of scale.
Answer: D
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In the long run, all of the following are true for a monopolist EXCEPT
A) P > ATC. B) P = MC. C) MR = MC. D) P > AVC.
The balanced budget multiplier has a range from zero to 1
Indicate whether the statement is true or false
Quebec is capable of producing 10,000 pallets of wood shingles or 8,000 barrels of maple syrup. Vermont is capable of producing 12,000 pallets of wood shingles or 12,000 barrels of maple syrup. a. Graph these production possibilities curves. Indicate from the slope, which has the absolute advantage, which the comparative advantage, and whether there are gains from trade. b. Assume that Vermont and Quebec each specializes in the good in which they have a comparative advantage. Suppose that Vermont and Quebec decide to trade 5,000 pallets of shingles for 5,000 barrels of syrup. Indicate this on the graph. How does this affect the well-being of the two societies? Explain.
What will be an ideal response?
Which of the following is a final good or service?
A. Wood pulp purchased by a paper company B. A box of brownies purchased by your instructor C. A computer chip purchased by Banana Computers D. Potatoes purchased by a potato chip company