According the graph shown, the firm's most efficient scale of operation is to produce quantity:
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
A. Q1.
B. Q2.
C. Q3.
D. Any quantity as long as P1 is charged.
B. Q2.
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Along a linear downward-sloping demand curve, the price elasticity of demand will be
A. equal to zero across each price range. B. greater than one across each price range. C. different across each price range. D. less than one across each price range.
If the income elasticity of demand for corn is 0.5, then as income increases
A) the demand for corn will increase. B) the demand for corn will decrease. C) corn will prove to be an inferior good. D) the supply curve of corn will shift leftward.
In a small Asian country, it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $4 million to $6 million
What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $16 million, assuming no technological change and no change in the hours of work? A) GDP would increase further by exactly $8 million. B) GDP would increase further by exactly $2 million. C) GDP would increase further, but by less than $2 million. D) GDP would increase further by more than $2 million
The economic analysis of extending the duration of unemployment benefits to 99 weeks involves both positive and normative analysis. Consider the following consequences of extending the duration of unemployment benefits:
a. Extending the duration of unemployment benefits to 99 weeks will create less incentive for some unemployed workers to seek employment. b. Extending the duration of unemployment benefits to 99 weeks will increase the total amount of government expenditure on unemployment benefits. c. The benefits received by those collecting unemployment benefits should be valued more highly than the increase in government expenditure needed to pay the benefits. d. By extending the duration of unemployment benefits to 99 weeks, the unemployed will have more time to acquire new skills before reentering the workforce. Which of the consequences above are positive statements and which are normative statements? A) a and b are positive statements; c and d are normative statements. B) Only b is a positive statement; a, c, and d are normative statements. C) a and d are positive statements; b and c are normative statements. D) a, b, and d, are positive statements; only c is a normative statement.