Which of the following will cause an inward shift of the production possibilities curve of an economy?
A) A decrease in the demand for goods and services
B) Introduction of better technology
C) A decline in the size of the labor force
D) An increase in the opportunity cost of the goods being produced
C
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In the short run, the lowest price that a perfectly competitive firm will accept without closing its doors is found by examining the average variable cost curve.
Answer the following statement true (T) or false (F)
Efficiency is reached by allocating resources to those who have the greatest willingness to pay for them. This can be achieved in a market where a negative externality is present by:
A. taxing consumers. B. giving consumers a subsidy. C. place a quota at the efficient level. D. All of these will achieve efficiency.
A risk-neutral monopoly must set output before it knows the market price. There is a 50 percent chance the firm's demand curve will be P = 40 ? Q and a 50 percent chance it will be P = 60 ? Q. The marginal cost of the firm is MC = 3Q. The expected profit-maximizing quantity is:
A. 5. B. 10. C. 50. D. 25.
The NAIRU:
A. can change over time. B. is difficult to measure. C. occurs at the economy's level of potential output. D. All of these statements are true.