Suppose the average total cost of producing semiconductors in a factory of a particular size declines over time as more semiconductors are produced. This drop in average total cost might best be explained by:
A. economies of scope.
B. economies of scale.
C. diminishing marginal productivity.
D. learning by doing.
Answer: D
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If production involves constant opportunity cost, the production possibilities frontier
A. is “bowed inward.” B. is a straight line. C. is “bowed outward.” D. is a wavy line. E. has an unpredictable shape.
Which of the following is an example of a good produced under perfect competition?
A) Cars B) Corn C) Bottled water D) Patented software
Refer to the above figure. How do you describe what is happening as the economy moves from point A to point C?
A) The economy has acquired new resources that are well suited for producing bread. B) Land that was once used to graze sheep is now being used to grow wheat. C) Resources are becoming unemployed. D) The technology for growing wheat has improved.
Total surplus is represented by the area
a. under the demand curve and above the price. b. above the supply curve and up to the price. c. under the supply curve and up to the price. d. between the demand and supply curves up to the point of equilibrium.