If the average interval between firms' price adjustments is relatively short
A) an increase in aggregate demand will cause a relatively short-lived increase in real GDP.
B) an increase in aggregate demand will cause a relatively long-lived increase in real GDP.
C) a reduction in aggregate demand will cause a relatively long-lived reduction in real GDP.
D) both B and C
A
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Which of the following situations depicts diseconomies of scale?
A) The average total cost of a firm increases from $50 to $55 when it increases its production from 10 units to 20 units. B) The average total cost of a firm decreases from $50 to $40 when it increases its production from 10 units to 20 units. C) The average total cost of a firm remains at $50 when it increases its production from 10 units to 20 units. D) The average total cost of a firm remains at $50 when it decreases its production from 20 units to 10 units.
Zane's Vanes is a service that restores old weather vanes. Zane has just spent $125 purchasing a 1920s-era weather vane which he expects to restore and sell for $500 once the work is completed
After having spent $125, Zane realizes that he will need to spend an additional $200 on materials to complete the restoration. Alternatively, he can sell the weather vane without restoring it for $200. What is his marginal benefit if he sells the weather vane without restoring it? A) $75 B) $125 C) $200 D) $300