The increasing returns would be a situation in which the
firm increases their workforce and other inputs in a matter of having to
increase the workforce by five percent and having to increase the output in a
total of eight percent.
There are several problems that make public goods necessary, but the primary one is that without access to certain public goods and services like parks and schools, poor people would have practically no chance at advancement.
Answer:
The fixed costs are too high. The marginal cost generally represents variable costs and they might be very low, but if the fixed costs are simply too high, they will need to increase the price of the plane tickets in order to break even. The break even formula is calculated by dividing total fixed costs by marginal revenue (selling price - variable costs).
Answer:
C Housing prices in Country A will increase as wood imports become more expensive.
Explanation:
Since country A imports all wood from other countries, an increase in price of wood by suppliers means that they are now expensive. Country A will be paying much more money for the same amount of supply they imported before prices rose. This will lead to housing prices to increase as a way to pass over the costs to homebuyers and tenants through rising home prices and rents respectively.
A. Experiencing an inflationary gap; when actual output exceeds potential output the price level rises because employers have to raise wage rates to entice more people into the labor market and employers have to pay more for other inputs that become more expensive to produce.
What is an output gap?
The difference between an economy's actual and potential output is measured economically as the "output gap." The maximum amount of products and services that an economy can produce at its peak efficiency, or when it is operating at capacity, is known as potential output. Potential output is frequently referred to as the economy's production capacity. An output gap suggests that an economy is running at an inefficient rate—either overworking or underworking its resources.
How it causes inflation?
Potential output, which is often defined as the level of output consistent with no pressure for prices to rise or fall, is frequently used by policymakers to measure inflation. The production gap serves as a quick indicator of the relative importance of the demand and supply sides of the economy in this situation. Thus, the output gap is a crucial link between the real side of the economy, which generates goods and services, and inflation. It quantifies the strength of inflation pressure in the economy.
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