When natural resources are commonly owned, the exhaustion of these resources are evenly spread over current and future periods.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Fiona and Alicia divide their time equally between ironing shirts and cooking meals. Fiona can iron 5 shirts and cook 2 meals in an hour. Alicia can iron 6 shirts and cook 1 meal in an hour. If they have to iron 15 shirts and cook 5 meals, who should specialize in which activity?
a. Fiona should do all the work.
b. Alicia should do all the work.
c. Fiona should specialize in cooking meals and Alicia should specialize in ironing shirts.
d. Alicia should specialize in cooking meals and Fiona should specialize in ironing shirts.
QUESTION 3Which of the following statements is true?
a. When long-run average total costs are increasing, the firm enjoys economies of scale.
b. Most industries exhibit long-run average costs that are shaped like an upside-down U.
c. Constant returns to scale occur when the short-run average-total-cost curve is horizontal.
d. When long-run average total costs are increasing, the firm has diseconomies of scale.
e. Constant returns to scale are never present in the real world.
QUESTION 4In a perfectly competitive industry, influence over price is exerted by:
a. individual sellers.
b. individual buyers.
c. the largest firms.
d. the forces of market supply and demand.
QUESTION 5Privatization of common property leads to overexploitation of natural resources.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6_____ determine the efficient pattern of specialization in production.
a. Total costs
b. Opportunity costs
c. Marginal costs
d. Sunk costs
QUESTION 7When a firm is experiencing economies of scale, it will:
a. underuse a larger plant size than is indicated by short-run efficiency concerns.
b. underuse a smaller plant than is indicated by short-run efficiency concerns.
c. overuse a larger plant size than is indicated by short-run efficiency concerns.
d. overuse a smaller plant size than is indicated by short-run efficiency concerns.
e. produce at the minimum short-run and long-run average costs.
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