In which of the following situations would the minimum efficient scale of operation provide little or no guidance regarding how many firms should serve the market to minimize production costs?
A) When the LRAC curve slopes downward over the relevant range of output.
B) When the LRAC curve hits its minimum point at a relatively low level of output and then increases and the demand for output is quite large.
C) When the LRAC curve hits its minimum point at a relatively low level of output but then remains constant as the scale of operation is increased and the demand for output is quite large.
D) When the LRAC curve initially increases and then decreases beyond some point.
C
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Answer the following statement(s) true (T) or false (F)
1. When a game has more than one Nash equilibrium, it is unlikely that a stable equilibrium will ever be reached. 2. The copycat game does not have a pure strategy Nash Equilibrium. 3. When mixed strategies are allowed, the Copycat Game does have a Nash equilibrium. 4. Nash equilibrium is a normative concept. 5. For an outcome to be Pareto optimal, the players' total payoff must be as large as possible.
The productivity of workers will increase in response to
A. An increase in the amount of physical capital per worker. B. An increase in diminishing returns. C. Lower wages. D. Higher resource costs.
The contention that specific sensitive domestic technologies must not be traded freely is
A. to protect domestic jobs. B. a national defense concern. C. the infant industry argument. D. dumping.
If the MPC is 0.75, and the government cuts spending by $100b, the overall effect on GDP will be:
A. an increase of $400b. B. a decrease of $250b. C. a decrease of $400b. D. an increase of $250b.