What differentiates an increasing-cost industry from a decreasing-cost industry?
What will be an ideal response?
An increasing-cost industry is an industry that has external diseconomies of scale. This implies that the long-run industry supply curve is upward sloping. A decreasing-cost industry has external economies of scale. In this type of industry, the long-run industry supply curve is downward sloping.
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Refer to Mexico and Japan. What is the cost of producing 1 bolt of clothing in Mexico?
a. 6 hours of labor.
b. 2 bushels of food.
c. 3 bushels of imported Japanese food.
d. 4 bolts of imported Japanese cloth.
"Bootstrap financings" are buyouts financed by
A) the company managers' own assets. B) finance companies. C) junk bonds. D) new issuance of bonds.
In order to fund industrywide advertising, managers of trade associations often try to charge the members that receive a lower marginal benefit from advertising ________.
A) a high fee B) the total cost of the advertising C) nothing D) a lower fee