Which of the following explains why long-run average total cost at first decreases as output increases?
a. diseconomies of scale
b. less efficient use of lumpy inputs
c. fixed costs become spread out over more units of output
d. gains from specialization of inputs
e. marginal costs rise at a slower rate than average costs in the short run
D
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There is general agreement among economists that rent controls cause shortages of housing, but despite this rent controls continue to persist. Why does this occur?
A. Many people do not understand the effects that controls cause. B. Property owners are politically unpopular. C. Many persons tend to benefit from rent controls. D. All of these responses are correct.
As shown in the figure above, the rent ceiling ________ consumer surplus and ________ producer surplus
A) decreases; decreases B) decreases; increases C) increases; increases D) increases; decreases E) decreases; does not change
According the Coase Theorem, the private sector can achieve social efficiency if the government:
a. establishes and enforces property rights. b. imposes taxes to serve as proxies for external costs. c. set rigorous environmental standards. d. encourages competition with antitrust laws.
One of the main advantages of commodity money is:
a. It never loses value because it is valued in terms of fiat money. b. Actually, there are no real advantages of commodity money. c. It is backed 100% by the central bank guarantees. d. It tends to fall in value as inflation rises and to rise as inflation falls. e. It cannot be easily duplicated and therefore manipulated for political advantage.