Diseconomies of scale
A. exist when long-run average cost increases as output increases.
B. exist when fixed cost increases as output increases.
C. result eventually as the firm uses more and more labor with a fixed capital stock.
D. both a and b
E. all of the above
Answer: A
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One effect of government mandating participation in the auto insurance market is it leads to:
A. higher premiums for all participants. B. lower premiums for all participants. C. the collapse of the market. D. free coverage for some participants.
Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. If the price of a round of golf drops to $20, the income effect:
A. predicts Sam will increase his consumption of both golf and tanning sessions. B. predicts Sam will double his consumption of golf. C. predicts Sam will consume more golf and less tanning sessions. D. predicts Sam will consume less golf and more tanning sessions.
A curve that depicts the relationship between price and quantity demanded is the:
a. supply curve. b. supply schedule. c. demand curve. d. equilibrium price.
Financial intermediaries are:
A. institutions that channel funds from people who have them to people who want them. B. government officials who bring together buyers and sellers in a market. C. those who negotiate terms of settlement between borrower and lender when one is in default. D. those who negotiate terms of settlement between buyer and seller when one is in default.