In the 1970s the international price of crude oil rocketed because:
a. the demand for crude oil fell short of its supply.
b. a new source of natural gas was discovered.
c. the demand for automobiles increased drastically.
d. the supply of oil was restricted by the oil exporting countries.
e. of the appreciation of dollar in the international market.
d
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Actions to lower the probability of a bad outcome ________ its expected cost and these actions are ________.
A) increase; inexpensive B) decrease; costly C) decrease; inexpensive D) increase; costly
Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed in fixed proportions. An increase in the price of coffee will yield
a. a substitution effect and an income effect in opposite directions. b. a substitution effect and an income effect in the same direction. c. a substitution effect but no income effect. d. an income effect but no substitution effect.
A firm that wants to achieve economies of scale could do so by
a. assigning limited tasks to its employees, so they can master those tasks. b. employing a smaller number of workers. c. producing a smaller quantity of output. d. producing an output level higher than the efficient scale.