Microeconomics

The production of cigarettes is highly automated; however, a worker is

The production of cigarettes is highly automated; however, a worker is required to monitor each machine. Machines and workers do not interact with one another. Given this information, there are most likely A) economies of scale. B) economies of scope. C) constant returns to scale. D) increasing returns to scale.   ANSWER C  

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Date: September 9th, 2020

Can consumption efficiency be achieved even if the efficient product m

Can consumption efficiency be achieved even if the efficient product mix is not achieved? What will be an ideal response?   ANSWER Efficiency in consumption implies that all consumers have the same MRS. This can be achieved with any product mix. Thus, consumers can be as well off as possible for any given product mix. […]

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Date: September 9th, 2020

At a perfectly competitive equilibrium with production and trade, the

At a perfectly competitive equilibrium with production and trade, the slope of the production possibility curve will be A) equal to the slope of the price line faced by the consumers. B) steeper than the slope of the price line faced by consumers. C) flatter than the slope of the price line faced by consumers. […]

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Date: September 9th, 2020