In Figure 45.2, at the perfectly competitive equilibrium, the wage will be 
Figure 45.2
A. between W1 and W2.
B. W1.
C. W2.
D. W*.
Answer: D
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Which of the following will most likely cause an outward shift in the production possibilities curve?
a. a reduction in the man-made productive resources available to the economy as the result of a decline in investment b. an increase in government payments to farmers for taking land out of production c. an increase from 40 to 50 hours in the average number of hours worked per week d. None of the above would cause an outward shift in the production possibilities curve.
In Hong Kong, the monetary authority can only increase the monetary base if they accumulate more U.S. dollars because:
A. the monetary authority in Hong Kong operates a currency board where its sole objective is to fix the exchange rate between its currency and the U.S. dollar. B. Hong Kong has received substantial funding from the U.S. Treasury and the loans were conditional on maintaining the value of the Hong Kong currency. C. the currency of Hong Kong is the U.S. dollar. D. the IMF required Hong Kong to peg its currency to the U.S. dollar in order to obtain a loan.
As a firm increases the level of output that it produces, short-run average fixed cost
A. rises and then falls. B. decreases. C. decreases up to a particular level of output and then increases. D. remains constant since fixed costs are constant.
Which of the following is an example of an external cost?
A. the opportunity cost of getting a college education B. the cost of tires for your car C. the cost of labor to a firm D. the pollution caused by automobile exhaust