Which of the following physical relationships might generate economies of scale?
A. Each lift truck requires one lift truck driver.
B. Proportionally larger pipes can transport more than a proportional increase in oil.
C. Larger equipment tends to weigh more and use more fuel on a per-unit-of-output basis.
D. A doubling of all inputs leads to a doubling of output.
Answer: B
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The real wage rate is $35 an hour. At this wage rate there are 100 billion labor hours supplied and 200 billion labor hours demanded. There is a
A) shortage of 300 billion hours of labor. B) shortage of 100 billion hours of labor. C) surplus of 100 billion hours of labor. D) surplus of 300 billion hours of labor. E) shortage of 200 billion hours of labor.
The cost of making an economic exchange is called a(n) ________ cost
A) sunk B) transaction C) social D) accounting
Suppose some firms exit a monopolistic competition industry. We would expect the demand curve of a firm already in the industry to:
A. become more elastic. B. remain the same since entering firms serve other customers in the market. C. shift to the right. D. shift to the left.
Which of the following is necessary for a system of marketable pollution permits to lead to beneficial trades between polluting companies?
A. Companies must have common abatement costs. B. There must be differences in abatement costs between companies. C. Company owners must have a social conscience and must be devoted to pollution abatement. D. The government must direct companies toward beneficial trades.