A firm scaled down its operation by reducing all inputs by 50% and experienced a less-than-50% decrease in output. If all input prices remain unchanged, the firm's long-run average cost exhibits:
A. economies of scale at the current output level.
B. diseconomies of scale at the current output level.
C. a constant long-run average cost at the current output level.
D. diminishing marginal returns at the current output level.
Answer: B
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In 2007, the U.S. sold $73 million of cigarettes to Iran. Iran paid for these cigarettes using
A) dollars. B) rials, the Iranian currency. C) euros. D) pounds.
M1 is the most liquid form of money.
Answer the following statement true (T) or false (F)
Suppose there are 1,825 taxi medallions in Boston, each valued at about $250,000. Assume the price elasticity of demand for taxi rides is 1; the current price for a taxi ride is $4.75 per mile, and the cost of the ride is $3.00 per mile. How much would a person be willing to pay for a new medallion if the city increased the number of medallions to 2,000? (Hint: The price of the medallions is equal to the total profit from the average total number of miles each medallion will accumulate.)
A. $250,000 B. $160,000 C. $337,000 D. $185,000
Rational self-interest is equivalent to pure selfishness
a. True b. False