Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P3 and Y1.
D. P2 and Y3.
Answer: D
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A small Caribbean island-country produces only pineapples and rum. If resources are used efficiently in the economy,
A. it will not be possible to produce more rum without decreasing the production of pineapples. B. it will be possible to produce more pineapples without decreasing the production of rum. C. it will be producing on its production possibilities curve. D. it will not be possible to produce more rum without decreasing the production of pineapples AND it will be producing on its production possibilities curve.
All of the following costs will vary depending on the geographic location of a firm's plant except which one?
A) zoning issues B) wages C) U.S. income taxes D) real estate values
Markets characterized by declining long-run average costs are often referred to as
A. natural monopolies. B. diseconomies of scale. C. perfect competition. D. nonprofit organizations.
Figure 9-2
Which of the following is true for the economy depicted in ?
a.
Potential output equals y1.
b.
It would be impossible for this economy to achieve an output greater than y1.
c.
When output y1 is achieved, the actual rate of unemployment will exceed the natural rate of unemployment.
d.
When output y1 is achieved, the actual rate of unemployment will be less than the natural rate of unemployment.