What is meant by decreasing returns to scale?
What will be an ideal response?
Decreasing returns to scale implies that an increase in the firm's scale of production leads to higher average costs per unit produced.
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In order to pay for services such as health care, education, and highways, governments
A) collect taxes B) sell tools and machinery to the business sector C) rely fully on donations from the population
If income elasticity is positive, a product is inferior
Indicate whether the statement is true or false
Assume soybeans are produced in a perfectly competitive market. A soybean farmer is currently maximizing his profits. If the market price of soybeans falls, after the farmer adjusts to the new price, he will be producing ________ bushels of soybeans, and his profit will be ________.
A. fewer; the same B. the same number of; the same C. fewer; lower D. more; the same
In the ________, the tax receipts from today's workers are used to pay benefits to retired and disabled workers and their dependents today.
A. public assistance (welfare) program B. Social Security system C. Medicare and Medicaid programs D. unemployment insurance program