In the graph shown, the country has:
A. a trade deficit.
B. a budget deficit.
C. a trade surplus.
D. neither a trade deficit nor trade surplus; exports are equal to imports.
Answer: A
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Which of the following is true at the point where diminishing returns set in?
a. Marginal product is at a minimum and marginal cost at a maximum. b. Both marginal product and marginal cost are at a minimum. c. Both marginal product and marginal cost are at a maximum. d. Marginal product is at a maximum and marginal cost at a minimum.
In a two-country world, the depreciation of the domestic currency shifts
A) the AD curve rightward and the SRAS curve leftward. B) the AD curve leftward and the SRAS curve rightward. C) both the AD curve and the SRAS curve rightward. D) both the AD curve and the SRAS curve leftward. E) the AD curve rightward and does not affect the SRAS curve.
According to economic theory, under perfect competition, the price of a depletable resource
A. becomes an inaccurate signal of scarcity. B. may fall as firms will develop substitutes. C. will be too volatile to let markets adjust. D. will increase as firms develop new innovations to extract the resource.
Long-run equilibrium for firms in monopolistically competitive industries is similar to that for firms in perfect competition in that:
A. price equals marginal cost. B. marginal revenue equals price. C. price equals average total cost. D. price equals minimum possible average total cost.