Refer to the graphs and information below. The assumption made about the domestic production opportunity costs in both countries is that they are:
Suppose the world economy is composed of just two countries: Italy and Greece. Each can produce steel or chemicals, but at different levels of economic efficiency. The production possibilities curves for the two countries are shown in the graphs below.
A. Constant
B. Variable
C. Increasing
D. Decreasing
A. Constant
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If the federal funds rate ________.
A. decreases, the prime rate will not change B. increases, the prime rate will decrease C. increases, the prime rate will increase D. decreases, the prime rate will increase
A subsidy
A. has the same impact on a market as a tax. B. has a larger impact on a market than a tax of the same amount. C. has a smaller impact on a market than a tax of the same amount. D. is the reverse of a tax.
The short-run equilibrium for a monopolistically competitive firm is at P = $28.47, ATC = $22.13, and MC = MR = $17.47. Which of the following is true?
A. Average cost must be rising. B. Additional firms will be attracted into the industry. C. The firm could raise price and increase profits. D. The firm could lower price and increase profits.
What happens when a product is path dependent?
a. The technology used to produce the product has a specific growth path. b. The product can sell for a higher price when it is new and there are no similar products consumers can buy than when it is older and consumers can choose to buy substitutes for the product. c. The cost of switching to a product with a better technology gives the product with the initial technology an advantage. d. The path that a product follows depends on the firm that uses the best technology to produce it.