If long-run average cost increases as firm size increases, then the firm is experiencing:
a. diminishing marginal returns.
b. economies of scale.
c. increasing marginal returns.
d. diseconomies of scale.
d
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One problem with the concept of utilitarianism is that
A) there is a cost to transferring income from the rich to the poor. B) there are increasing marginal costs. C) there are decreasing marginal benefits. D) markets cannot adjust to income redistribution.
Centralization of decision-making in a firm is a good idea when:
a. the people who produce the information also have decision-making skills. b. all the information comes from internal sources. c. the incentives of the decision-makers is not aligned with the firm's share holders. d. those who have the relevant information are not equipped to analyze it.
If a firm in a perfectly competitive market faces a market price of $5, and it decides to produce 400 units, the firm's total revenue will be:
A. $2,000. B. $5. C. $405. D. $400.
If the slope of a demand curve is infinite, then the price elasticity of demand is:
A. infinite. B. one. C. equal to the price of the good. D. zero.