If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50, this is evidence of
A) diminishing returns.
B) economies of scale.
C) diseconomies of scale.
D) the law of supply.
Answer: B
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Keynesian analysis may have contributed to chronic federal budget deficits by
A) advocating transfer payments to redistribute income. B) persuading the public that any given deficit could be a result of responsible policy decisions. C) putting economists in charge of fiscal policy. D) reducing the power of the government to finance expenditures through taxation.
The principal of a loan is the:
A. original amount of the loan. B. set of rules and conditions borrowers agree to when taking out a loan. C. set of rules and conditions savers agree to when agreeing to let someone borrow their money. D. original amount that people want to borrow.
If the price of a foreign currency rises, we say there has been an appreciation of the domestic currency
a. True b. False
Imposing a restrictive quota on imported plasma TVs will likely
a. increase the price of the plasma TVs and decrease the quantity consumed. b. increase both the price of the plasma TVs and the quantity consumed. c. leave the price of the plasma TVs unchanged but decrease the quantity consumed. d. leave the price and the quantity consumed of plasma TVs unchanged, because domestic producers will expand production to make up for the reduction in imports