A decrease in long-run average costs resulting from increases in output is
A) attributed to economies of scale.
B) attributed to diseconomies to scale.
C) attributed to constant returns to scale.
D) attributed to the law of diminishing marginal product.
Answer: A
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When imports and exports for the same type of good are nearly equal:
a. the laws of comparative advantage break down. b. it is an indication that nearly all the trade is intra-industry. c. exports are probably just "finished" in the nation instead of being fully sourced there. d. there is a very low level of intra-industry trade.
Suppose that there are only two countries in the world, Heartland and Soulland. The two countries produce only two goods, corn and drill presses. At its current level of production, Heartland must give up production of 1/4 drill press to produce an additional 100 bushels of corn. Soulland must give up 1 drill press to produce an additional 100 bushels of corn. No trade now occurs between the two economies, and both economies are operating on their respective production possibilities frontiers. 89. (Exhibit: Heartland and Soulland) The country with a comparative advantage in the production of corn is:
A) Heartland. B) Soulland. C) neither; they both use the same technology. D) neither; they both use the same amount of resources.
When a producer has a comparative advantage in producing a good, it means the producer:
A. can produce more of that good than others with the same number of workers. B. has the ability to produce the good at a lower opportunity cost than others. C. has no reason to trade with others. D. is efficient in production.
If a firm minimizes its losses by shutting down in the short run, then at all other output levels,
a. variable cost would exceed total revenue b. total revenue exceeds total cost c. marginal revenue exceeds marginal cost d. total cost is zero e. total revenue is zero