When long-run average costs rise as output increases, the firm is experiencing
A) diseconomies of scale.
B) diminishing returns.
C) constant returns to scale.
D) economies of scale.
Answer: A
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Which of the following is an example of a price ceiling?
A. Subsidies for apartment rent in major cities. B. Price supports for agricultural products. C. Minimum-wage laws for unskilled workers. D. Limits on interest rates charged by credit card companies.
Assume an exchange rate of $1 = 0.60 British pound. A U.S. product sells in Britain for 18 pounds. By what percentage will dollar revenues change if the dollar price of a pound falls to 0.50 pound?
A. +20% B. +16% C. -16% D. -20%
A decrease in the effective tax rate on capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if taxes are fully deductible from income; otherwise, shift up and to the right.
Which of the following refers to a shift in the demand curve?
A) "This new advertising campaign should really increase our demand." B) "Let's drop our price to increase our demand." C) "We dare not raise our price because our demand will drop." D) "If new sellers enter the market, the demand for the product is bound to increase."