Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the likely change in capital flow in sector Y will eventually
A. generate excess profits.
B. eliminate all profits.
C. result in excess losses.
D. eliminate all losses.
Answer: D
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Figure 5-9
In Figure 5-9, the consumer’s marginal rate of substitution at his optimum choice of X and Y is
A. ?1. B. 16. C. 8. D. ?8.
In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, then the firm will produce
A) 8 million units and set a price of $21 per unit. B) 12 million units and set a price of $18 per unit. C) 16 million units and set a price of $16 per unit. D) nothing unless the government provides subsidies to cover its losses.
With a rise in the rate of depreciation that ________, the user cost of capital falls, leading to a ________ capital-labor ratio, thus a ________ in investment
A) actually occurs to capital, higher, rise B) actually occurs to capital, lower, rise C) actually occurs to capital, lower, fall D) is used to calculate corporate taxes, higher, rise E) is used to calculate corporate taxes, lower, fall
Because of the ____________, the United States and Europe are guilty of selling agricultural products at below cost or dumping the products on the market.
Fill in the blank(s) with the appropriate word(s).