A production possibilities curve is downward sloping because of
a. the law of increasing costs
b. the finite nature of the resource base
c. inefficiency
d. improper output mix
e. unemployment
B
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For a short-run cost function which of the following statements is (are) not true?
a. The average fixed cost function is monotonically decreasing. b. The marginal cost function intersects the average fixed cost function where the average variable cost function is a minimum. c. The marginal cost function intersects the average variable cost function where the average variable cost function is a minimum. d. The marginal cost function intersects the average total cost function where the average total cost function is a minimum. e. b and c
In monopolistic competition, each firm competes with other firms offering identical substitutes.
Answer the following statement true (T) or false (F)
The Federal Reserve
A. is not legally authorized to monitor or regulate complicated financial derivatives. B. should not have promoted the use of complicated financial derivatives the way it did during the financial crisis. C. did not pay close enough attention to derivatives in the period leading up to the financial crisis. D. could have prevented the financial crisis through the use of complicated financial derivatives.
Refer to the diagram. The initial demand for and supply of pesos are shown by D 1 and S 1 . Suppose the United States reduces its imports of Mexican goods, shifting its demand for pesos from D 1 to D 2 . Under a system of freely floating exchange rates:
A. gold would flow from Mexico to the United States.
B. the peso price of dollars would rise from B pesos equals $1 to A pesos equals $1.
C. a problem of rationing a shortage of pesos would arise in the United States.
D. the dollar price of pesos would increase to C dollars equals 1 peso.