A firm is experiencing ________ on the downward-sloping portion of a firm's long run average cost curve.
A. decreasing returns to scale
B. constant returns to scale
C. diminishing marginal returns
D. increasing returns to scale
Answer: D
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If a 10 percent increase in income results in an 8 percent increase in the quantity demanded of a good, the income elasticity of demand equals ________ and the good is ________ good
A) 0.80; an inferior B) 1.2; a normal C) 0.80; a normal D) -1.2; an inferior
All of the following might explain a firm offering quantity discounts except:
a. the lower costs of handling large orders. b. an inelastic demand for the good. c. a monopoly power in this market. d. the adoption of a sales maximization strategy.
Refer to the figure above. What is the quantity supplied in the market when the market is supplied by one firm?
A) 30 units B) 45 units C) 60 units D) 90 units
Most economists would consider it sensible for the federal government to ________ its current operating and capital expenditure budgets and then ________
A) consolidate, never borrow to fund it B) consolidate, borrow what is necessary to fund it C) separate, borrow what is necessary to fund the current operating budget. D) separate, borrow what is necessary to fund the capital expenditure budget.