If the price of product Y is $25 and its marginal cost is $18:
A. Y is being produced with the least-cost combination of resources.
B. society will realize a net gain if less of Y is produced.
C. resources are being underallocated to Y.
D. resources are being overallocated to Y.
Answer: C
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If the MB of polluting decreased, then what would happen to the optimal level of pollution?
A. Decrease B. Unsure C. Increase D. Stay the same
If the Fed increases the money supply, then 1/P
a. falls, so the value of money falls. b. falls, so the value of money rises. c. rises, so the value of money falls. d. rises, so the value of money rises.
Assume that movement from point A to point B represents a 25 percent change in the price level. What would be the corresponding short-run change in the price of inputs?
a. 100 percent
b. 50 percent
c. 25 percent
d. no change
During 2007, the United States and Japan announced possible limits on Chinese imports through higher tariffs on Chinese products. To avoid these limits, China would have had to:
A. decrease the value of the yuan and increase its trade surplus. B. increase the value of the yuan and increase its trade surplus. C. decrease the value of the yuan and decrease its trade surplus. D. increase the value of the yuan and decrease its trade surplus.