Increasing returns to scale occurs when a firm's:
a. average costs of production increase as its output increases.
b. average costs of production decrease as its output increases.
c. average fixed costs increase as its output increases.
d. marginal costs increase as its output increases.
Ans: b. average costs of production decrease as its output increases.
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Why did the United States abandon the gold standard in the 1930s?
A) The government wanted to move away from a floating exchange rate system to a fixed exchange rate system. B) The Treasury Department in the United States found it was cheaper to print paper money instead of gold coins. C) The government wanted to rapidly expand the money supply in response to the Great Depression. D) New sources of gold were discovered, so the price of gold plummeted, dramatically reducing the value of the dollar.
When examining the costs of regulation to the U.S. economy, economists can safely ignore the opportunity costs of regulation because they are relatively insignificant compared with the direct costs of regulation
a. True b. False Indicate whether the statement is true or false