Which of the following statements explains the difference between diminishing returns and diseconomies of scale?
A) Diminishing returns are the result of changes in explicit costs. Diseconomies of scale are the result of changes in explicit costs and implicit costs.
B) Diminishing returns refer to production while diseconomies of scale refer to costs.
C) Diminishing returns cause a firm's marginal cost curve to rise; diseconomies of scale cause a firm's marginal cost curve to fall.
D) Diminishing returns apply only to the short run; diseconomies of scale apply only in the long run.
Answer: D
You might also like to view...
Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the country's apple cro
A) The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice falls. B) The equilibrium price of apple juice rises and the equilibrium quantity of apple juice might rise or fall. C) The equilibrium price of apple juice falls and the equilibrium quantity of apple juice might rise or fall. D) The equilibrium price of apple juice might rise or fall and the equilibrium quantity of apple juice rises.
Refer to Figure 8.3. Holding other variables constant, if the economy is originally in equilibrium at the intersection of D2 and S2 and households increase their preference for leisure over labor, the economy would move to the new equilibrium point
represented by A) w1 and L2. B) w3 and L2. C) w2 and L2. D) w2 and L1.
Refer to the graph below for a purely competitive firm. When the firm is in equilibrium in the short run, its average fixed cost is:
A. EH
B. DE
C. DH
D. DB
If the real interest rate increases:
A. The investment demand curve will shift to the right B. The investment demand curve will shift to the left C. There will be a movement upward along the investment demand curve D. There will be a movement downward along the investment demand curve