The fact that since 1990 the number of movie screens in the United States has grown faster than the number of theaters illustrates the benefits of
a. economies of scale
b. constant long-run average cost
c. diseconomies of scale
d. increasing long-run average cost
e. a U-shaped marginal cost curve
QUESTION 2The least-cost way of producing a particular rate of output is represented by a point of tangency between a short-run average cost curve and the
a. total cost curve
b. short-run average total cost curve
c. average variable cost curve
d. long-run average cost curve
e. marginal cost curve
QUESTION 3Marginal cost indicates how much total cost increases if one more unit is produced or how much total cost drops if production declines by one unit.
a. True
b. False
QUESTION 4At a given rate of output, marginal cost equals the slope of the
a. long-run average cost curve
b. short-run average total cost curve
c. planning curve
d. total cost curve
e. average variable cost curve
QUESTION 5Diseconomies of scale at the firm level occur
a. wherever the firm's long-run average cost curve is horizontal
b. wherever the firm's long-run total cost curve is horizontal
c. where marginal cost equals marginal revenue
d. if a firm becomes too large
e. if any of the firm's plants becomes too large
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