You would expect that your firm is experiencing decreasing returns to scale if
a. Long run average costs increase with output
b. Long run average costs decrease with output
c. Long run average costs are constant with respect to output
d. None of the above
QUESTION 2Jim is haggling with a car dealer on the price of a used car. During the bargaining, Jim discovers that the car has a significant number of scratches which he had not noticed before. The total surplus from the sale has
a. Increased
b. Decreased
c. Was not affected
d. All of the above
QUESTION 3You would expect that your firm is experiencing increasing returns to scale if
a. Long run average costs increase with output
b. Long run average costs decrease with output
c. Long run average costs are constant with respect to output
d. None of the above
QUESTION 4Jim is haggling with a car dealer over the sale price of a used car. When he entered the store, the storekeeper was already haggling with the other customer. His bargaining position could get worse if
a. The customer leaves
b. Another customer enters the store, interested in the car
c. He gets an offer from another seller
d. All of the above
QUESTION 5You would expect that your firm is experiencing a constant returns to scale if
a. Long run average costs increase with output
b. Long run average costs decrease with output
c. Long run average costs are constant with respect to output
d. None of the above
QUESTION 6Jim is haggling with a car dealer, along with another customer, over the sale price of a used car. When he entered the store, the storekeeper was already haggling with the other customer. His bargaining position would improve if
a. The other customer leaves
b. He receives an offer from a competing car dealer
c. He can make it clear that he will leave if his offer isn't accepted
d. All of the above
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