Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars
A. remains constant.
B. decreases.
C. initially increases, then decreases.
D. increases.
Answer: D
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According to the Keynesian model with fixed money wages, real wages should be
a. negatively correlated with changes in output. b. positively correlated with changes in unemployment. c. negative correlated with changes in the price level. d. fixed as well. e. both a and c.
If your income is fixed and the economy experiences inflation, your ability to purchase goods and services rises.
Answer the following statement true (T) or false (F)
The virtual currency battle between Facebook and Zynga reminds us that:
a. Once a company starts a virtual currency, it is difficult and costly to abolish the currency. For nations, the same is true. Countries, like Greece, that entered the European Monetary Union now find it very difficult and costly to abandon the euro. b. Companies that start virtual currencies can abolish them rather quickly, which stands in stark contrast to countries, like Greece, that entered the European Monetary Union but now find it difficult and costly to abandon the euro. c. Companies that start virtual currencies are like countries, such as Greece, that entered the European Monetary Union. In both cases, it appears relatively easy to abandon the virtual currency and currency area. d. Countries, like Greece, that entered the European Monetary Union now find it relatively easy and inexpensive to abandon the euro. This stands in stark contrast to companies that start virtual currencies and wish to abolish them.
Which of the following is likely to be present in a perfectly competitive market structure?
a. barriers to entry b. advertising of products c. differentiated products d. many buyers and sellers