Figure 8-2
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In Figure 8-2, which of the following moves can be explained by a decrease in disposable income?
A. E to B
B. A to C
C. A to D
D. B to E
Answer: A
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Opening trade between two nations would:
a. shift their production possibilities curves outward. b. shift their production possibilities curves inward. c. leave the production possibilities unchanged and increase their consumption possibilities. d. leave the production possibilities unchanged and decreased their consumption possibilities.
Even though households do not actually purchase certain items, the government estimates and adds to the consumption component what the household would pay for these items in the marketplace. An example of this type of item is
a. a car that an individual builds from parts of old cars b. food that a farm family grows for themselves c. a pond that a household member digs by hand d. police and fire protection e. a barn that a household builds on their own property
In order for money to be an effective medium of exchange, it is important to have it serve as a unit of account
Indicate whether the statement is true or false
A monopolistic competitor produces 100 units of a good at a per-unit cost of $22. If it charges a price of $19 per unit of the good, it will ________
A) earn zero economic profits in the short run B) incur a loss of $300 in the short run C) earn a profit of $1,900 in the short run D) incur a loss of $100 in the short run