After sugar refiner has produced fine sugar for baking purposes, what is left over is used to produce molasses. This technology exhibits

1. Economies of scale
2. Economies of scope
3. Diseconomies of scale
4. Diseconomies of scope

Eddys' Electronics found that instead of producing a dvd player and a gaming system separately, it is cheaper to incorporate dvd playing capabilities in their new version of the gaming system. Eddy's is taking advantage of

1. Economies of Scale
2. Learning curve
3. Economies of Scope
4. Decreasing marginal costs

The main reason(s) firms in a competitive market cannot earn positive profits in the long run is(are)

1. assets can quickly move in and out of the industry when demand fluctuates
2. an increase in demand leads to entry of firms which absorb the extra demand
3. a decrease in demand leads to exit of firms from the market such that there is no surplus
4. all of the above

Holding other factors constant, if bad weather destroys the annual crop for carrots, it causes the supply curve for carrots to

1. Shift to the left, causing the prices of carrots to rise
2. Shift to the left, causing the prices of carrots to fall
3. Stay the same
4. The supply curve does not shift. Only the demand curve shifts.

The indifference principle states that

1. If an asset is mobile, then in the long run, it will be indifferent about where it is used
2. In the long run, a mobile asset will make the same profit, no matter where it goes
3. If an asset is mobile, then in the long run, it would stay with the first user
4. Only A&B

Marginal productivity is

1. The total output associated with total inputs
2. The total output associated with extra inputs
3. The extra output associated with total inputs
4. The extra output associated with extra inputs

An increase in the price of a complement shifts the demand curve to the

1. right
2. left
3. it does not change the demand curve
4. none of the above

A decrease in the price of a substitute shifts the demand curve to the _______

1. right
2. left
3. it does not change the demand curve
4. none of the above

Once marginal costs rise above the average cost,

1. Average cost increases
2. Average cost decreases
3. Average costs will stay the same
4. None of the above

Two cities face identical prices for their housing. City A decided to be a pollution free city "Clean town" and all the factories would locate in city B "Smog Ville", we expect the prices of housing in city A "Clean town" to

1. increase
2. decrease
3. stay the same
4. none of the above

Peter's Pizzeria sells both pizzas and wings. It wants to increase the sales of its pizzas. If it decides to increase the price of the wings, it is assuming that

1. the pizza and the wings are substitutes
2. the pizza and the wings are complements
3. the pizza and the wings are unrelated in demands
4. it cannot increase the sales of its pizzas

All of these could be sources of economies of scale except

1. Investment in more efficient technology
2. Specialization
3. A bottleneck procedure
4. Discounts on bulk purchase of inputs

A sudden decrease in the market demand in a competitive industry leads to

1. Losses in the short-run and average profits in the long-run
2. Above average profits in the short-run and average profits in the long-run
3. New firms being attracted to the industry
4. Demand creating supply

A perfectly competitive firm has

1. A perfectly elastic demand for its products
2. A perfectly inelastic demand for its products
3. A downward sloping demand for its products
4. None of the above

Diseconomies of scale are also known as

1. Increasing returns to scale
2. Decreasing returns to scale
3. Constant returns to scale
4. None of the above

If average cost is decreasing, then marginal cost

1. Must be increasing
2. Must be greater than average cost
3. Must be less than average cost
4. None of the above

While you were an intern you bought 5 packages of hot dogs a month. After acquiring a full-time job with a considerably higher salary, you stopped purchasing hot dogs. For you, hot dogs are a

1. Complementary good
2. Normal good
3. Inferior good
4. Substitute good

Competitive firms can earn positive profits in the

1. Long run only
2. Long run and the short run
3. Short run only
4. All of the above

A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts needed to make bikes falls. If the change in supply is greater than the change in demand, the price will _________ and the quantity will _________.

1. Rise, rise
2. Rise, fall
3. Fall, rise
4. Fall, fall

A supply curve describes

1. the relationship between price and quantity demanded
2. the relationship between price and quantity supplied
3. the relationship between a group of buyers and sellers
4. none of the above