Answer the following statements true (T) or false (F)
1. If the minimum efficient scale in an industry is smaller than the size of the market of that industry, then we would have a natural-monopoly situation.
2. The fundamental reason that newspapers have such high prices is the high production costs from diseconomies of scale.
3. "3-D printers" are capable of producing real output like chairs or machine parts using a computer-controlled special printer at low cost even if you produce only one unit of output.
4. If start-up firms can quickly shift the short-run cost curves up and to the left, they would improve their chances of becoming profitable.
1. FALSE
2. FALSE
3. TRUE
4. FALSE
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When net taxes increase and government purchases decrease, _____
a. the price level will rise b. money supply must rise c. the aggregate demand curve shifts leftward d. output and employment increase e. the aggregate supply curve shifts leftward
Consumer confidence affects the final price level of an expansionary policy. In this graph, what is the difference in price level between consumer confidence increasing and consumer confidence not increasing?
a. PL2 for consumer confidence increasing; PL1 for consumer confidence not increasing
b. PL1 for consumer confidence increasing; PL2 for consumer confidence not increasing.
c. PL4 for consumer confidence increasing; PL2 for consumer confidence not increasing
d. PL3 for consumer confidence increasing; PL4 for consumer confidence not increasing