If a firm is not forced to take account of a negative externality it creates, it will produce
the quantity at which
If a price decrease results in no change in seller’s total revenue then
The national debt
a. is currently greater than the annual federal deficit
b. is reduced by the revenue generated from the federal deficit
c. decreases as the deficit is reduced
d. is a flow variable
e. varies depending on developments in the stock market
A corporation that specializes in owning shares of stock in other corporations is called a
Whenever marginal cost is below average cost, average cost must fall as output
increases.
If demand for a good is represented by curve D” in Figure 5-10, then an increase in
supply of the good will cause the equilibrium
Which of the following would most likely cause measured GDP to overstate the actual
output produced in a year?
a. Increased production in the underground economy
b. A decline in the quality of goods and services produced
c. Increased production for home use (non-market production)
d. A decline in population
e. Increased purchases of market produced services
Wage rates in other markets are assumed constant along the labor supply curve for a
particular labor market.
A profit-maximizing firm will never increase production if doing so causes total
revenue to decrease.
If a society is operating on its production possibilities frontier, and then decides to
produce less health care,
Most of the growth in living standards over the last ten years can be attributed to
growth in labor force participation.
Suppose that for each automobile Japan produces it must forego producing 40
computers. The United States must forego producing 80 computers for each automobile
it produces. Which of the following is true?
a. Japan has a comparative advantage in producing computers.
b. the U.S. has a comparative advantage in producing computers.
c. the U.S. has a comparative advantage in producing automobiles.
d. the U.S. has an absolute advantage in producing automobiles.
e. the opportunity cost of producing computers is the same for Japan and the U.S.
The overall performance of the economic system as a whole is the focus of
If the dollars per peso exchange rate fell,
a. few firms would want to relocate to Mexico
b. the demand for pesos would fall
c. more Americans would travel to Mexico
d. Americans would buy fewer Mexican goods
e. the demand for pesos curve would shift inward
If inflation is perfectly anticipated, benefits are indexed, and there are no restrictions on
contracts, which group loses purchasing power because of inflation?
a. Borrowers, lenders and retirees
b. Only borrowers
c. Neither lenders, borrowers, nor retirees
d. Only lenders
e. Only retirees