In the middle portion of the long-run average cost curve, the flat portion of the curve indicates that economies of scale have been exhausted. In this situation, called ______________, allowing all inputs to expand does not much change the average cost of production.
a. diseconomies of scale
b. constants of production
c. average costs of production
d. constant returns to scale
d. constant returns to scale
Constant returns to scale show that economies of scale have been exhausted and expanding all inputs proportionately does not change the average cost of production.
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If the tax elasticity of supply is 0.6 and tax rates increase by 10 percent, the quantity of labor supplied will
A. Decrease by 1.67 percent. B. Increase by 6 percent. C. Decrease by 6 percent. D. Increase by 1.67 percent.
Which of the following firms is in an oligopoly?
A. Verizon (a cellular phone company) B. United Airlines (an airline company) C. Marlboro (a cigarette manufacturer) D. All of these are in an oilgopolistic market structure.
The accumulation of international debt increased the debt service requirements of the indebted countries. After the debt crisis began, this caused
A) the adoption of expansionary policies to return to growth. B) large capital inflows to service the debt. C) the adoption of strongly contractionary policies to reduce consumption and government deficits. D) an intensification of industrial policies targeted on import substitutes. E) a reduction in inequality.
During the 1960s, most economists believed that expansionary macro-policy
a. that caused inflation would permanently reduce unemployment. b. that caused inflation would permanently increase unemployment. c. could not be utilized to reduce unemployment. d. did not affect inflation.