Related to the Economics in Practice on page 197. Which of the following represents a situation in which a school is experiencing economies of scale?
A. Student enrollment increases by 30 percent and average total cost increases by 50 percent.
B. Student enrollment increases by 50 percent and average total cost increases by 20 percent.
C. Student enrollment increases by 30 percent and average total cost does not change.
D. Student enrollment increases by 25 percent and average total cost decreases by 10 percent.
Answer: D
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A firm raises the price it charges. The firm's total revenue does not change. What can we conclude about the price elasticity of demand?
A) Demand is elastic. B) Demand is unit elastic. C) Demand is inelastic. D) Demand is perfectly elastic. E) Not enough information is given to conclude anything about price elasticity of demand.
In the Classical system, the total output of goods and services and total employment are determined by all of the following except
A) the interest rate. B) the labor force. C) the supply of capital. D) existing technology.
If U.S. net exports are positive, then net capital outflow is
a. positive, so foreign assets bought by Americans are greater than American assets bought by foreigners. b. positive, so American assets bought by foreigners are greater than foreign assets bought by Americans. c. negative, so foreign assets bought by Americans are greater than American assets bought by foreigners. d. negative, so American assets bought by foreigners are greater than foreign assets bought by Americans.
Two members of the Kenyan parliament from coffee-growing areas said that no firm should have a monopoly to market Kenyan coffee. The retail coffee company Tetu Coffee has sparked a storm in the industry by promising to earn the country Sh400 (Kenyan Shilling) billion annually if given exclusive licenses to market Kenyan coffee. The members of parliament said the coffee bean farmers should be free to sell their beans to the highest bidder.If all coffee growers had to sell their produce to Tetu Coffee, this would be a(n):
A. price-discriminating monopoly. B. oligopoly. C. monopsony. D. natural monopoly.