All of the following are reasons for economies of scale EXCEPT
A) diminishing marginal product.
B) specialization.
C) dimensional factors.
D) more efficient production equipment.
Answer: A
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Suppose the nominal interest rate is 4% and the rate of inflation is 3%. The real interest rate is therefore
A) 7%. B) 1%. C) 0%. D) -1%. E) none of the above.
If the absolute value of the price elasticity of demand for aspirin equals 0.8 then
A) aspirin has few substitutes. B) the demand for aspirin is elastic. C) the demand for aspirin is inelastic. D) aspirin is a normal good.
If a firm adopts a labor-saving piece of technology, it will:
A. increase the marginal product of labor. B. decrease the marginal product of labor. C. increase the marginal supply of labor. D. decrease the marginal supply of labor.
Who is recognized as the founder of public choice theory?
a. James Buchanan. b. Steve Forbes. c. Joseph Pechman. d. Adam Smith.