Suppose a factory that produces toasters experiences a decline in its average total cost with no change in its output level. This decline might be explained by:
A. economies of scale.
B. technological change.
C. decreasing marginal utility.
D. increasing marginal productivity.
Answer: B
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Economists use the term capital to describe that factor of production that includes human-made resources such as factories, buildings, machinery, and tools.
Answer the following statement true (T) or false (F)
In the above figure, if initial equilibrium is at point A and there is a fully anticipated increase in aggregate demand from AD1 to AD2 due to an anticipated increase in the money supply, then
A) the price level will shift to P2 in the long run. B) the economy will move directly from point A to point C without passing through point B. C) the price level will shift to P2 in the short run. D) the economy will move directly from point A to point B, and will remain at point B in the long run.
Household production is more likely to occur when
a. it requires many specialized resources b. technology makes it more costly than market production c. tax avoidance is undesirable d. more control over the final product is desirable e. all of the above
Increases in the general price level are primarily a macroeconomic issue
a. True b. False