The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when
A) there are constant returns to scale.
B) there are increasing returns to scale.
C) there are decreasing returns to scale.
D) the marginal product of labor is increasing in the amount of labor input.
A
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Countries that trade a small amount with a single foreign country tend to float their exchange rate to the foreign country's currency
Indicate whether the statement is true or false
If the merger of two firms is challenged by an antitrust agency, one possible solution is for the firms to ________.
A) sell some of their assets to a third firm to avoid reducing competition. B) include more than three firms in the merger. C) include a third firm in the merger. D) sell their assets to each other to avoid reducing competition.
Economic efficiency is achieved when the price of a unit of a commodity is equal to the marginal cost of producing that unit
a. True b. False Indicate whether the statement is true or false
Perfect central planning is nearly impossible for all of these reasons except: a. production processes between industries are often interdependent
b. some processes must be decided together, and not individually, because of their interdependence. c. if the output target for one industry is adjusted, many others must also be adjusted. d. all of these reasons are correct.