Consider a U-shaped long-run average cost curve that has a minimum efficient scale at 6,000 units of output. In this case, this industry would be
A) perfectly competitive if the market quantity demanded is 20,000 units.
B) monopolistically competitive if the market quantity demanded is 12,000 units.
C) an oligopoly if the market quantity demanded is 18,000 units.
D) an oligopoly if the four-firm concentration ratio is more than 10 percent.
Answer: C
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For each $1 of a tax cut, economists expect consumption to
A. decrease by $1. B. decrease by less than $1. C. increase by less than $1. D. increase by $1.
Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000 If year 1 is the first year of this nation's existence and year 6 is the present year, this nation's public debt is
A. $275 billion. B. $3,540 billion. C. $100 billion. D. $230 billion.
In the economic way of thinking, money is
A) the root of all evil. B) what makes the world go round. C) a general medium of exchange. D) an institution, which tends to increase transaction costs. E) the source of scarcity in commercial society.
Which of the following is an example of specialization?
A) The output of workers in a chocolate factory doubled when a new manager was appointed. B) The cost of production of a light bulb making factory decreased as its capacity increased. C) Instead of a worker making an entire shoe, the total productivity increased when different workers were allotted different jobs in the production process. D) Import of better technology and machinery from developed countries greatly increased the number of laser printers that a company was manufacturing.