When the opportunity cost of producing carrots increases as more carrots are produced, then:
a. no more carrots will be produced.
b. resources are equally suited to the production of carrots and to other goods.
c. the production possibilities curve is a straight line.
d. the production possibilities curve becomes positively sloped.
e. the law of increasing costs is present.
e
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
Refer to Figure 13-17. Suppose the firm is currently producing Qf units. What happens if it increases its output to Qg units?
A) It will move from a zero profit situation to a loss situation B) Its average cost of production will fall and its profit will rise. C) It will move from a zero profit situation to a profit situation D) It will be taking advantage of economies of scale and will be able to lower the price of its product.
In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market purchase ________ the supply of reserves and causes the federal funds interest rate to ________, everything else held constant
A) decreases; fall B) increases; fall C) increases; rise D) decreases; rise
According to the quantity theory of money currently used by monetarists, assuming velocity is constant (at a value of 5), a 10 percent increase in the money supply will raise
a. nominal GDP by 50 percent. b. real GDP by 10 percent. c. nominal GDP by 10 percent. d. real GDP by 50 percent.