A production function may exhibit:
a. constant returns to scale and diminishing marginal productivities to all inputs.
b. constant returns to scale and diminishing marginal productivities to all but one input, but at least one input must have a constant marginal productivity.
c. constant returns to scale and diminishing marginal productivity to at most one input.
d. constant returns to scale and diminishing marginal productivities for no inputs.
a
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000 . the firm's marginal cost equals $15 and its average total cost equals $11 . The firm sells its output for $12 per unit. At Q = 999, the firm's total cost amounts to
a. $10,985. b. $10,990. c. $10,995. d. $10,999.
“Economies of scope” occur when
A. fixed costs are high and marginal costs are low. B. a monopoly can produce for the entire market. C. similar production techniques can be applied to several products. D. costs are fully distributed.
A technological improvement will
A. decrease the desired capital stock. B. increase the desired capital stock. C. have the same effect on the desired capital stock as an increase in corporate taxes. D. have no effect on the desired capital stock.