Diseconomies of scale tend to occur in large firms because
A monopoly is a
When opportunity costs rise as more of a good is consumed, the production possibilities
frontier will be concave (bowed out) with respect to the origin.
The terms of trade
a. equal the ratio of opportunity costs of production in two countries
b. equal the ratio of marginal production costs in two countries
c. is the quantity of one good that is exchanged for one unit of another good
d. are determined by absolute advantage
e. equal the ratio of average production costs in two countries
A non-discriminating monopolist’s marginal revenue curve lies below its demand curve
because
Growth in employment occurs only because of increases in labor demand due to
government hiring.
The Federal Reserve can tightly control
a. cash in the hands of the public
b. cash in the hands of the public and demand deposits
c. demand deposits
d. funds in savings accounts and checking accounts
e. borrowing by the government
If the Fed conducted an open market sale of bonds, what would most likely happen in
the bond market?
a. The excess demand for bonds would cause the price of bonds to fall.
b. The excess supply of bonds could cause the price of bonds to rise.
c. There would be no effect in the bond market.
d. The excess supply of bonds would cause the price of bonds to fall.
e. The excess demand for bonds would cause the price of bonds to rise.
In the short run,
a. spending determines income, but not the other way around
b. income determines spending, but not the other way around
c. spending determines the interest rate, but not the other way around
d. spending determines income, and income determines spending
e. spending determines the productivity, and productivity determines spending.
Roger spends all of his money on racquetballs and food. What would happen to Roger’s
budget line if his income increased by 10 percent, holding prices constant?
An increase in the money supply will increase both the amount of money demanded
and output.
Perfect planting and harvesting weather results in a record high crop of wheat. If wheat
growers experience an increase in total sales revenue, then the demand for wheat must
be
If the government increases taxes, which of the following will occur in the short run?
a. An increase in GDP, an increase in the price level, an increase in money demand and
an increase in the interest rate.
b. An increase in GDP, an increase in the price level, a decrease in money demand and
an increase in the interest rate.
c. An increase in GDP, a decrease in the price level, an increase in money demand and
an increase in the interest rate.
d. A decrease in GDP, a decrease in the price level, a decrease in money demand and a
decrease in the interest rate.
e. A decrease in GDP, an increase in the price level, an increase in money demand and a
decrease in the interest rate.
From 1929 to 1993, the first four years of the Great Depression, U.S. output dropped by
more than
a. 10 percent
b. 80 percent
c. 5 percent
d. 50 percent
e. 25 percent
The inflation rate in the United States has always been positive.