If Mexico has a comparative advantage in the production of oil compared to France, then
A. Mexico also has an absolute advantage in the production of oil.
B. France cannot produce oil.
C. France has an absolute advantage in the production of oil.
D. Mexico can produce oil at a lower opportunity cost than France.
Answer: D
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In the theory of consumer choice, when a person is choosing which good or service to consume, how does he or she select the units of good or service to consume? a. The person selects the good or service based on need
b. The person selects the units of a good or service that generates the greatest marginal utility. This process continues until there budget is spent. c. The person selects the units of a good or service that generates the greatest marginal utility per dollar spent. This process continues until the person's budget is spent. d. The person randomly selects what they buy until the budget is spent.
Menu costs refer to the: a. costs of changing price lists
b. start-up costs incurred by a firm that cannot be recovered. c. costs of the alternatives that must be forgone in order to pursue a certain action.. d. costs of producing an extra unit of output.
On a certain date, the banking system had $40 billion in excess reserves. The legally required reserve ratio was 20 percent. Potentially, if these funds were loaned and eventually the entire amount re-deposited with a bank, the banking system as a whole could increase the money supply by
a. a maximum of $40 billion. b. a maximum of $160 billion. c. a maximum of $200 billion. d. more than $200 billion.
Suppose we are studying the market for electricity provision.
Suppose we are studying the market for electricity provision. Electricity provision requires costly grids and cables, thus Electricity production exhibits economies of scale in the long-run. In a given region there is only one electricity provider.
Below is the graph depicting the market for regional electricity providers:
What is the profit maximizing level of output?
What price will the firm set?
How much more output would be produced at the competitive market equilibrium?
What is the dead weight loss at the monopoly market outcome?
True/False. Electricity provision is a monopoly market because of patent protection.
True/False. The firm earns positive profit at the monopoly market outcomes.
More competing firms enter the electricity market. What will happen.