If economic activity increases, it follows that economic welfare:
A. may increase, decrease, or remain unchanged depending on the nature of the increase in economic activity.
B. increases as more goods and services become available.
C. does not change since it does not depend on the level of economic activity.
D. decreases as more resources are depleted.
Answer: A
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Suppose that entry of new firms into an industry significantly increases the market demand for a key input. If supply of the key input is very price inelastic, then, for each firm in the industry in the long run,
a. external diseconomies shift its entire ATC curve upward b. external economies shift its entire ATC curve downward c. external diseconomies move it to the left along its original ATC curve d. diseconomies of scale shift its entire ATC curve upward e. economies of scale shift its entire ATC curve downward
The most profitable price for a monopolist is
A) the highest price a consumer is willing to pay for the monopolist's product. B) the price at which demand is unit elastic. C) a price that maximizes the quantity sold. D) found where the profit-maximizing quantity hits the demand curve.
Suppose the equilibrium wage is $10 per hour. A minimum wage is a ________ and affects employment if it is set at ________
A) price floor; $12 per hour B) price floor; $8 per hour C) price ceiling; $10 per hour D) price ceiling; $12 per hour
The economic growth model predicts that ________ across countries will converge over time
A) growth rates B) income levels C) GDP per capita D) foreign direct investment rates