Because saving is a leakage, sudden additional saving results in higher equilibrium income for society, ceteris paribus.
Answer the following statement true (T) or false (F)
False
Additional saving actually leads to lower equilibrium income because saving is not spent and therefore creates no immediate income. This is sometimes called the paradox of thrift.
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A natural monopoly occurs when:
A. long-run average costs decline continuously through the range of demand. B. a firm owns or controls some resource essential to production. C. long-run average costs rise continuously as output is increased. D. economies of scale are obtained at relatively low levels of output.
The opportunity cost of producing one additional truck is
A. the profit that could have been earned from selling that truck. B. the amount of other goods that could not be produced because productive resources were used instead to produce that truck. C. the price of the truck. D. all of the choices are true.