Say's Law is the idea that
a. in the long run, the economy reaches full employment automatically
b. the aggregate production function, along with the labor market, determines the economy's level of output
c. total output will always exceed total spending
d. whenever a good or service is produced, an equal amount of income is created
e. markets always clear
D
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Which of the following statements is true?
a. When long-run average total costs are increasing, the firm enjoys economies of scale. b. Most industries exhibit long-run average costs that are shaped like an upside-down U. c. Constant returns to scale occur when the short-run average-total-cost curve is horizontal. d. When long-run average total costs are increasing, the firm has diseconomies of scale. e. Constant returns to scale are never present in the real world.
The study conducted by Eric Bond of Vanderbilt University on the repair histories of a large sample of pickup trucks over three years old ascertained that:
a. the repair costs of trucks held by original users was similar to those held by second hand users. b. the repair cost of trucks held by second hand users was higher compared to those held by original users. c. the repair cost of trucks held by original users was higher compared to those held by second hand users. d. the repair costs of trucks held by original users as well as those held by second hand users increased by the same magnitude every year.