An increase in the production of capital goods
A) must increase the current production of consumer goods.
B) must decrease the future production of consumer goods.
C) shifts the production possibilities frontier inward in the future.
D) shifts the production possibilities frontier outward in the future.
D
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The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is
A) a market. B) property rights. C) absolute advantage. D) dynamic comparative advantage.
Quick Buck and Pushy Sales produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product.
Suppose Quick Buck and Pushy Sales decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Quick Buck cheats by reducing its price to $1 and Pushy Sales matches the price cut, then if consumers are evenly split between the two firms, what will be Quick Buck's economic profit?
A. $3,000 B. $2,000 C. $1,000 D. $1,500
A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 1,000 units is $2.50. The minimum possible average variable cost is $2. The market price of the product is $2.50. To maximize profits, the firm should
A. increase production to more than 1,000 units. B. decrease production to less than 1,000 units. C. continue producing 1,000 units. D. shut down.
Uncertainty and speculation are microeconomic consequences of inflation.
Answer the following statement true (T) or false (F)