Which of the following will result in an outward shift of the production possibilities curve [PPC]?
a. A decrease in the quantity of resources
b. An improvement in the quality of resources
c. A fall in education standards
d. An unsustainable growth in population
e. An increase in unemployment rate
b
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If the ice cream industry is a competitive price-taker market and all ice cream producers are earning zero economic profit, what will be the impact of an increase in the demand for ice cream?
a. Firms will exit the ice cream industry in the long run since they are earning zero economic profit. b. The firms will now be able to earn long-run economic profit assuming that barriers to entry remain low and new firms can enter the market. c. A shortage of ice cream will develop. d. The price of ice cream will rise initially, inducing the existing firms to expand output and new firms to enter the industry.
A coalition of firms who agree to restrict output for the purpose of earning an economic profit is called a(n):
A. pure monopoly. B. duopoly. C. cartel. D. oligopoly.
An example of a positive statement is:
A) The rate of unemployment is 4 percent. B) A high rate of economic growth is good for the country. C) Everyone in the country needs to be covered by national health insurance. D) Baseball players should not be paid higher salaries than the president of the United States.
In dealing with their financing needs, developing countries have found that the inflation tax provides:
A. neither a short-run nor a long-run solution. B. a short-run solution but not a long-run solution. C. a long-run solution but not a short-run solution. D. both a short-run and a long-run solution.