When you double all of the inputs to your production

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25. when you double all of the inputs to your production process, your total output is less than doubled. Your production appears to exhibit which of the following? a.decreasing returns to scale b. constant returns to scale c. increasing returns of scale d. none of the above
26. if your production technology exhits constant returns to scale, and you increase all inputs to 20%, what can you expect to occur to your output level? a. output stays constant at previous
27.the break-up of AT&T in 1984 separated the production of long distance and local telephone service and sacrified benefits from a. economies of scale b.diseconomies of scale
28. if price of CD players decreases, what can we expect to happen in the market for compact discs? a.equilibrium price of compact discs will fall
29. suppose both equilibrium price and quantity of golf clubs rise. Which of the following explanations would best explain outcome? a. decrease in demand for golf clubs with no change in supply b.increase supply of golf clubs with no change in demand c.decrease in demand for golf clubs and decrease in the supply of mustard d.increase in demand for golf clubs with no change in supply
30.Five forces model is used to a. understand how an individual firm creates value b.determine
31. Cars are lasting longer. Expected number of miles traveled over a vehicles life has risen to 180,000 miles in 2001 from 128,000 in 1977. Using supply and demand, predict how the
increased longevity of cars will affect the price and quantity of new cars sold in the U.S. (Hint: plot the shifts in yearly demand and supply for new cars in the U.S; an increase in longevity means that the supply of used cars increases. Since used cars are a substitute for new cars, show what happens to the demand for new cars}
32. prostitution is unskilled labor with no barriers to entry. Prostitution also diminishes a prostitute’s chance for marriage. So why do prostitutes earn relatively high wages. Why? (HINT: The indifference principle)

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