Economies of scale exist whenever long-run average costs:
A. decrease as output is increased.
B. remain constant as output is increased.
C. increase as output is increased.
D. None of the statements is correct.
Answer: A
Economics
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If a consumer borrows at an interest rate greater than the interest rate at which he or she can lend, then
A) banks cannot make a profit. B) the budget constraint has a kink at the endowment point. C) the consumer must be a lender. D) this makes no difference for consumer behavior.
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A drought destroys much of the peach crop. As a result, consumer surplus in the peach market:
a. increases. b. decreases. c. remains unchanged. d. equals the deadweight loss increase.
Economics