The level of output at which all economies of scale have been exhausted is known as
A) constant returns to scale.
B) minimum efficient scale.
C) the economically efficient output level.
D) optimal economic size.
Answer: B
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The demand for money curve is shown in the figure above. What could shift the demand for money curve rightward from the curve illustrated in the figure above?
A) a decrease in real GDP B) a decrease in the supply of money C) a fall in the nominal interest rate. D) an increase in the price level E) a fall in the real interest rate
A Californian student consumes Internet services (I) and books (B). Her preferences are represented by a Cobb-Douglas utility function:
U(I,B) = I1/4B1/4 The prices of each good is $2 and the student has an income of $200. Over the course of the past year, the price of internet services has risen to $4, but the price of books has remained the same. The government has decided provide this student with additional money to compensate for the higher price of internet services. In order to determine the transfer the government has three consultants who have made the following suggestions: Consultant A: The student's income should be increased by a percentage found using a consumer price index (CPI). Consultant B: The additional income should allow the student to get her initial level of utility. a. Find the consumer's optimal bundle before the increase in price occurs. b. Find the consumer's optimal bundle after the increase in price occurs with income still at $200. c. Find the amount of the transfer implied by consultant A. d. Is the student necessarily better or worse off than before from such a transfer implied by consultant A? Explain why. e. Is the transfer implied by consultant B more or less than the amount implied by A? Explain. What is the precise dollar amount implied by consultant B?
The federal funds rate is the interest rate that:
A. the Fed charges to banks that borrow from it. B. banks charge the Fed for using their reserves. C. the Fed pays on bank reserves. D. banks charge each other for borrowed money.
In 2000, Microsoft was
A. issued a consent decree requiring it to be sold to new owners. B. found not guilty of violating U.S. antitrust laws. C. fined more than $1 billion for violating U.S. antitrust laws. D. ordered by a judge to split into two companies.