When there are economies of scale in production:
a. long-run average total cost declines as output expands
b. long-run average total cost increases as output expands.
c. marginal cost increases as output expands.
d. the marginal product of an input diminishes with increased utilization.
a
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The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers
When Paul maximizes his profit, the difference between marginal cost and price is A) $0. B) $40. C) $60. D) $30. E) $20.
In the U.S. economy in 1991, real GDP was 4861.4 (in billions of 1987 dollars), the capital stock was 13,806.2 (in billions of 1987 dollars), and employment was 118.4 (in millions of workers)
In 1992 the numbers were: real GDP 4986.3, capital stock 14,040.8, employment 119.2. Suppose the production function in both years is Y = AK0.25N0.75. (a) Calculate total factor productivity for 1991 and 1992. (b) How much did total factor productivity grow from 1991 to 1992? (c) Calculate the percent increase in real output between 1991 and 1992. (d) Suppose tax incentives had raised the capital stock in 1992, making it 10% higher, to 15,444.9. If employment didn't change, what would have been the percent increase in real output between 1991 and 1992? (e) Instead of the increase in the capital stock in part d, suppose employment was 10% higher in 1992, making it 131.1. With the capital stock fixed at 14,040.8, what would have been the increase in real output between 1991 and 1992?
Suppose that at a bicycle shop, instead of having each worker assemble an entire bicycle themselves, one person welds the frames, another person works on the braking system, another person works on the tires, and another person works on the gears
This best demonstrates the concept of A) division of labor. B) microeconomics. C) comparative advantage. D) absolute advantage.
Other things equal, a country's long-run aggregate supply will shift to the left when _____
a. the aggregate expenditure on education rises b. the productivity of labor rises c. the quantity of natural resources rises d. the mortality rate rises e. the amount of investment rises