Firms are encouraged by the profit motive to use inputs efficiently
a. True
b. False
Indicate whether the statement is true or false
True
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Does the existence of non-tradable goods allow for deviations from Purchasing power Parity?
What will be an ideal response?
"Learning by doing" results in decreased average costs of production and is illustrated by a downward shift of the firm's long-run average cost curve
Indicate whether the statement is true or false
To avoid subsidies, the government should cap the price for natural monopolies at their:
A. marginal cost. B. average total cost. C. average variable cost. D. fixed cost.
Which of the following statements regarding the cheap foreign labor argument is correct?
a. If there is an abrupt change in foreign competition that severely penalizes American workers, the U.S. government should immediately adopt protectionist measures. b. In the long run, labor will be cheap (wages are low) in those nations where labor is most productive. c. If workers in other countries are willing to supply their products with little compensation, this must ultimately raise the standard of living of the average American worker. d. American workers can never suffer from foreign competition since our monetary and fiscal policies always produce high employment at home.