What economic impact would the closing of a nearby military base have on a town? Would people and businesses that did not directly deal with the military personnel be affected?
What will be an ideal response?
Through the multiplier effect, the closing of the military base would have a large effect on the town. The businesses that sold directly to the military personnel would lose sales, resulting in declining profits and layoffs. With less income, these business owners and workers would buy less goods and services from other businesses in town, which would drop the income of the owners and workers in the other businesses. With less income, they would also decrease their spending and the multiplier effect would spread through the town.
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If total fixed cost increases, which of the following will NOT change?
A) total cost B) average fixed cost C) marginal cost D) average total cost E) ALL costs increase when total fixed cost increases.
Suppose an economy produces milk and honey, and milk is plotted along the horizontal axis of the production possibilities frontier
If the production in the economy is centrally planned (and not market oriented) so that the MRS for the current production level is 3 but the MRT is 2, then there will be an excess ________ for milk and an excess ________ for honey. A) demand, supply B) demand, demand C) supply, demand D) supply, supply E) The market is in equilibrium, and there are no imbalances in supply or demand.
Enforcement of antitrust laws is the responsibility of
a. only the Department of Justice b. only the Federal Trade Commission c. only the Antitrust Division d. both the Justice Department and the Federal Trade Commission e. the President
Both Jill and John own toothpick factories. Jill's factory has low fixed costs and high variable costs. John's factory has high fixed costs and low variable costs. Currently each factory is producing 1,000 boxes of toothpicks at the same total cost. Complete the following statement with the correct answer. If each produces
A. more, their costs will be equal. B. less, their costs will be equal. C. less, the costs of Jill's factory will exceed those of John's factory. D. more, the costs of Jill's factory will exceed those of John's factory.