Consider the production possibilities frontier in the figure shown. The opportunity cost of cars when moving from point B to point C:
A. there is no opportunity cost when we move from B to C.
B. is greater than the opportunity cost of cars when moving between any other two points.
C. is greater than the opportunity cost of cars when moving from point A to point B.
D. is less than the opportunity cost of cars when moving from point A to point B.
Answer: C
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Assuming that the total market size remains constant, a monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing in the long run because
A) some of its customers have switched to purchasing the products of new entrants in the market. B) as the firm raises its price in the long run, it will lose some customers to new entrants in the market. C) its costs of production rises. D) new entrants into the market are more likely to have cutting edge products.
If money demand is extremely sensitive to changes in the interest rate, the money demand curve becomes almost horizontal. If the Fed expands the money supply under these circumstances, then the interest rate will
A) change very little and investment and consumer spending will change very little. B) rise substantially and investment and consumer spending will rise substantially. C) fall substantially and investment and consumer spending will fall substantially. D) fall substantially and investment and consumer spending will change very little.
What role should the government play with respect to the agricultural sector in developing countries in their attempt to alleviate poverty?
What will be an ideal response?
A level at which the marginal production goes up with new investment:
a. increasing marginal returns b. total cost c. marginal revenue d. marginal product of labor e. marginal cost