Suppose a firm is in a range of production where it is experiencing economies of scale. Knowing this, we can predict that:
A. the long-run average total cost curve is upsloping.
B. a 10 percent increase in all inputs will increase output by less than 10 percent.
C. a 10 percent increase in all inputs will increase output by more than 10 percent.
D. the firm is encountering problems of managerial bureaucracy because of its size.
Answer: C
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The primary focus of microeconomics is
A) to study how we managed to eliminate scarcity. B) our government's monetary policy. C) to examine the behavior and operation of the individual units or sectors that make up the economy. D) the levels of employment and inflation. E) to examine the operation of the entire (aggregate) economy.
Refer to Table 4-1. The table above lists the highest prices three consumers, Tom, Dick, and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of one of the shirts is $28 dollars
A) Tom will receive $12 of consumer surplus from buying one shirt. B) Harriet will receive $25 of consumer surplus since she will buy no shirts. C) Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts. D) Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts.