Henry Ford’s use of mass-production techniques to produce cars faster and cheaper illustrates how ______.
a. production innovations can create economies of scale
b. problems set in when manufacturing increases quickly
c. assembly lines removed the need for a large workforce
d. an increasing output level raises the average total cost
a. production innovations can create economies of scale
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Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
a. an increase in demand for housing and higher housing prices. b. an increase in demand for housing and lower housing prices. c. a reduction in demand for housing and higher housing prices. d. a reduction in demand for housing and lower housing prices.
In any year, real GDP
A) must always be less than potential GDP. B) might be greater or less than potential GDP. C) will always be greater than potential GDP because of the tendency of nations to incur inflation. D) always equals potential GDP.
Economists generally criticize high barriers to market entry because
a. the ability of consumers to discipline producers is weakened. b. unregulated monopolists and oligopolists can often gain by increasing output and raising price. c. legal barriers to entry will encourage firms to "invest" resources in developing highly desired products that consumers are willing to pay more for. d. entry barriers are popular with consumers but not businesses.
All of the following are examples of spending on factors of production in the circular flow model except
A) Bima hires two students to work at his ice-cream store. B) "Get Fit Together" purchases 3 new treadmills for its gym. C) Iris buys a dozen roses for her mother's birthday. D) The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.