Refer to the above graph. To maximize profits, the firm should produce the quantity:
a. 0C
b. 0A
c. 0K
d. 0B
Answer: a 0C
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Alice has $10 to spend on wine and cheese. If wine is $2.50 a glass and cheese $2, draw the corresponding budget line. Then draw three indifference curves, one showing the amount of wine and cheese Alice would choose, one showing less preferred combinations of wine and cheese, and the last showing preferred but unaffordable combinations. ?
What will be an ideal response?
An increase in the real interest rate causes
A) the IS curve to shift to the right. B) the IS curve to shift to the left. C) a movement up the IS curve. D) a movement down the IS curve.
Americans whose jobs have been lost to free trade should, in theory:
A. leave the workforce, in the long run. B. gain surplus, as the income effect outweighs the price effect of their labor. C. be able to find new jobs, given time. D. have extended bouts of unemployment due to static job skills.
As the price of flour (an input in the production of cookies) increases, firms that produce cookies will:
A. increase the supply of cookies. B. increase the quantity of cookies supplied. C. decrease the quantity of cookies supplied. D. decrease the supply of cookies.