The only way that the family can consume more and enjoy a higher standard of living is to:
A. decrease the amount each person produces.
B. increase both how many people are in the family, and the amount each one produces.
C. increase how many people are in the family.
D. increase the amount each person produces.
Answer: D
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Let the production function be q = ALaKb. The function exhibits constant returns to scale if
A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.
One disadvantage of a partnership is
A) limited liability. B) lower monitoring costs. C) difficulty raising funds. D) it permits greater specialization.
In a constant cost industry,
a. a natural monopoly is likely to occur. b. total cost is the same, no matter how much a firm produces. c. the long-run supply curve will be perfectly elastic. d. entry of new firms in the industry will lead to a reduction in the cost of inputs.
According to the theory of efficiency wages, firms operate more efficiently if wages are below the equilibrium level
a. True b. False Indicate whether the statement is true or false