Round Things, Inc.'s production process exhibits economies of scale. Currently its long-run average total cost is $1/unit. If Round Things doubles its use of all inputs, its new long-run average total cost will be
A. $1/unit.
B. greater than $1/unit but less than $2/unit.
C. greater than $2/unit.
D. less than $1/unit.
Answer: D
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All of the following actions are potential rule -of-reason violations except which one?
A) a firm's agreement with a customer about the markets in which the customer is allowed to resell the product B) a firm's agreement with a customer about the resale price of its product C) a tying sale with a customer D) an agreement with a competitor firm to divide the market
Government restrictions on the use of an open-access resource
a. may improve efficiency b. will decrease efficiency c. are unnecessary d. contribute to pollution of the resource e. contribute to depletion of the resource
If a country does not have an absolute advantage in the production of at least one commodity, then it cannot gain from free trade.
Answer the following statement true (T) or false (F)
Classical economists argue that
A. the government should actively intervene in the economy to eliminate business cycles. B. government policies will be ineffective and counterproductive. C. wages and prices don't adjust quickly, so the economy is slow to return to equilibrium. D. the government should have an active role in the economy.