The observed change in the reserves of copper, lead, and zinc between 1960 and 1990 was most likely caused by
A. low prices discouraging exploration for new reserves.
B. a slowdown in demand growth.
C. high prices that stimulated exploration.
D. the discovery of substitutes.
Answer: C
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If aggregate expenditures are less than real GDP, then:
a. both inventories and real GDP will decline. b. inventories will decline but real GDP will increase. c. inventories will increase and real GDP will decline. d. both inventories and real GDP will increase. e. inventories will increase but real GDP will remain unchanged.
Susie doesn't buy ice cream this week at the grocery store because she intends to start a diet in a few days. Her behavior is an example of:
A. positive framing. B. the endowment effect. C. status quo bias. D. a commitment device.
Figure 33-2
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Given the situation in graph (1) in Figure 33-2, what action could be expected from the economy’s self-correcting mechanism?
A. An increase in aggregate demand B. A decrease in aggregate demand C. An increase in aggregate supply D. A decrease in aggregate supply
Suppose Jason owns a small pastry shop. Jason wants to maximize his profit, and thinking back to the microeconomics class he took in college, he decides he needs to produce a quantity of pastries which will minimize his average total cost. Will Jason's
strategy necessarily maximize profits for his pastry shop? A) Yes; Since Jason's pastry shop is in a perfectly competitive market, the only way to maximize profit is to produce the quantity where average total cost is minimized. B) Not necessarily; This strategy will only maximize Jason's profit in the long run, but not in the short run. C) No; In order to maximize profit, Jason would never want to produce the quantity where average total cost is minimized. D) Not necessarily; Depending on demand, Jason may maximize profit by producing a quantity other than that where average total cost is at a minimum.