Which of the following is NOT true when there are large economies of scale such that one firm can produce at a lower average cost than can be achieved by multiple firms?
A) This situation produces a natural monopoly.
B) Proportional increases in output yield proportionally small increases in total cost.
C) The long-run average cost curve of the firm will increase at a low level of output.
D) There will only be one firm in this industry.
Answer: C
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The high price of agricultural land is basically
A) the cause of high food prices. B) the result of high food prices. C) unrelated to food prices because processing costs dominate food prices. D) unrelated to food prices because there is no opportunity cost of producing land.
A change in consumption spending caused by income changes is ________ change in spending, and a change in government spending that occurs to improve roads and bridges is ________ change in spending
A) an autonomous; an induced B) an induced; an autonomous C) a contractionary; an expansionary D) an expansionary; a contractionary
Alt-A mortgages are
A) mortgages which are bundled together by financial institutions and sold to investors. B) mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgages. C) mortgages issued to borrowers with flawed credit histories. D) government-backed mortgages issued by Fannie Mae and Freddie Mac.
The demand curve of a commodity slopes downward because of:
a. the insatiable nature of human wants. b. the presence of double coincidence of wants. c. the law of demand. d. the scarcity of goods and services in an economy. e. the law of diminishing marginal utility.