Suppose there are two firms that make automobiles, Ferrari and General Motors. Ferrari has one assembly plant with only a few hundred employees. General Motors has several assembly plants and thousands of employees. If there are economies of scale in automobile production, which statement is true?
a. General Motors should produce fewer cars to improve its efficiency.
b. Efficiency allows
General Motors to use fewer raw materials per automobile.
c. The output level that makes Ferrari most efficient also makes General Motors most efficient.
d. When the ATC curves of the two firms cross, General Motor's ATC curve is falling.
e. The average fixed cost curve for Ferrari is higher because they produce fewer cars.
D
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You have just found the consumer's optimal combination of goods using constrained optimization. The marginal utility of income is the:
A) Cobb-Douglas statistic. B) Hicks factor. C) Slutsky equation. D) Lagrange multiplier.
Which of the following is NOT true about a certificate of convenience and public necessity?
A) It is a barrier to entry. B) It is a patent. C) It is issued by a government agency. D) It limits competition.
Technically there are no balance-of-payment deficits or surpluses because _____________.
Fill in the blank(s) with the appropriate word(s).
Refer to the graph below, where Sd and Dd are the domestic supply and demand curves for a product. The world price of the product is $6. If an import quota of 40 units were imposed on the product, then the equilibrium price would be:
A. $6 and the quantity consumed 80 units
B. $8 and the quantity consumed 70 units
C. $10 and the quantity consumed 60 units
D. $12 and the quantity consumed 50 units