Long-run average cost is never greater than short-run average cost because in the long run,
A) capital costs equal zero.
B) the firm can move to the lowest possible isocost curve.
C) wages always increase over time.
D) wages always decrease over time.
B
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Mark can make 3 tables and 1 chair in a day while John can make 4 tables and 1 chair in a day. Which of the following is true?
A) Mark has a comparative advantage in making tables. B) Mark has an absolute advantage in making tables. C) John has an absolute advantage in making tables. D) John has a comparative advantage in making chairs.
A point that lies above the production possibilities frontier (PPF) represents a combination of at least two goods that is
a. unavailable. b. available. c. representative of efficient production. d. representative of inefficient production. e. none of the above