Explain how the arrival of inexpensive broadband has changed the PPF
What will be an ideal response?
The arrival of inexpensive broadband shifts the PPF outward as shown by the change from the initial PPF to the new PPF in Figure 3.5 . The intersection of the new PPF along the axis measuring video entertainment increases and the intersection of the new PPF along the axis measuring oth-er goods and services does not change.
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If a demand curve for a good is perfectly inelastic, then the seller could
A. increase price and not change the number of units purchased. B. ignore the effects of costs on its profits. C. rely on buyers to look for other products if it increases price. D. sell more units by advertising.
A bank has no excess reserves and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, the bank's excess reserves will now be
A) -$5,000. B) -$1,000. C) $1,000. D) $5,000.
The approach to calculating GDP that measures the contribution of each firm to GDP is referred to as the
a. expenditures approach to measuring GDP b. factor payments approach to measuring GDP c. value added approach to measuring GDP d. productivity approach to measuring GDP e. output approach to measuring GDP
Which of the following statements is correct?
a. If duopolists successfully collude, then their combined output will be equal to the output that would be observed if the market were a monopoly. b. Although the logic of self-interest decreases a duopoly's price below the monopoly price, it does not push the duopolists to reach the competitive price. c. Although the logic of self-interest increases a duopoly's level of output above the monopoly level, it does not push the duopolists to reach the competitive level. d. All of the above are correct.