Economies of scale occur when
A) a firm's long-run average total costs fall as it increases the quantity of output it produces.
B) the marginal product of labor is greater than the average product of labor.
C) short-run marginal cost falls.
D) the demand for a firm's output increases.
Answer: A
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In the above figure, Graph D with Capital on the vertical axis and labor on the horizontal axis implies that
A) the marginal product of labor is increasing as more labor is employed. B) the marginal product of labor is decreasing as more labor is employed. C) the capital and labor are perfect substitutes. D) capital and labor have to be employed in fixed proportions.
The payoff matrix is a fundamental tool of
a. monopolistic competition. b. game theory. c. corporate finance theory. d. regulatory oversight.
The value of a good is
a. subjective. b. objective or intrinsic. c. determined by a government statistical agency. d. determined by its cost of production.
Which of the following is directly included in the calculation of GDP?
A. The final sale of a brand new Cadillac. B. The appreciation in value of shares of stock. C. The sales of land to a builder. D. The sales of sand to a glassmaker.