Dasenbrock and Gauss farms are able to achieve huge cost savings as they increase their acreage. This would be referred to in economics as
a. achieving diseconomies of scale.
b. achieving deadweight loss.
c. achieving economies of scale.
d. achieving diminishing returns.
c. achieving economies of scale
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Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question.
Prior-to-trade (autarky) producer surplus equals areas
A. B + C. B. J + H. C. B + C + D. D. B + C + D + E + F.
If the Federal Reserve targets the money supply, and the money demand curve shifts to the left, then the Fed
A) can maintain the money supply target, but at a lower interest rate. B) can maintain the money supply target with no change in the interest rate. C) can maintain the money supply target, but at a higher interest rate. D) cannot maintain the money supply target.
Economies of scale for firms in an industry can limit competition
Indicate whether the statement is true or false
Its critics claim that when advertising ____ the elasticity of demand, firms are able to ____
a. decreases; lower their advertising budget b. increases; become more competitive c. increases; increase their advertising budget d. decreases; charge a larger mark-up over marginal cost