The price of crude oil rose to over $100 per barrel in early 2013. What would we expect to see happen to the supply of plastic, which is produced using crude oil?
A) The supply of plastic will increase.
B) The supply of plastic will decrease.
C) The supply of plastic will stay the same because the government requires plastic producers to meet statutory minimum production levels.
D) The supply of plastic will stay the same because of the profit motives of plastic producers.
B
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Refer to Figure 24-2. Ceteris paribus, an increase in the expected price of an important natural resource would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
Often trade will not occur because
a. transaction costs are too high b. neither party has an opportunity cost c. the benefits to one party just equal the losses to the other party d. no one expects to gain from the trade e. the profits of the firm are excessive
Which of the following events prompted the birth of market monetarism?
A) the Great Depression B) the Great Recession C) the 1907 Bankers' Panic D) the establishment of the European Union
The law of diminishing marginal returns
A. causes average fixed costs to decline continuously as output increases. B. causes the difference between average total cost and average variable cost to shrink as output increases. C. results in MC but not ATC curves eventually increasing at an increasing rate. D. results in average variable cost (AVC), average total cost (ATC), and marginal cost (MC) curves eventually increasing at an increasing rate.