Other things held constant, investment in physical capital will increase:
a. labor productivity.
b. national income
c. wages.
d. all of the above
d
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If the minimum efficient scale of a firm is small relative to the demand for the good, then
A) many small firms can compete in the market. B) several large firms will enter the market thereby reducing competition. C) there will be no economic profits for any small firms, so no new firms will ever enter the market. D) the firms already in the market have lower average total cost than any new firm entering the market.
A change in any of the ceteris paribus conditions for demand leads to a
A) a good going from an inferior good to a normal good. B) movement along the demand curve. C) shift of the demand curve. D) change in supply.
Firms in perfectly competitive markets who wish to maximize profits ought to produce:
A. where marginal revenue equals market price. B. as many units as their scale allows. C. at capacity and plan to expand in the long run. D. where total profit is the greatest.
The productivity of any input is independent and is not affected by the other resources that are used.
Answer the following statement true (T) or false (F)