An efficient economy:
a. uses available resources fully.
b. uses the best division of labor.
c. produces an output combination at some point along the production possibility curve.
d. all of these.
d
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Explain the relationship between relative prices and the slope of a country's production possibilities frontier
What will be an ideal response?
If firms in a competitive price-searcher market are currently experiencing economic profits, then over time,
a. new firms will enter the market, and the current firms will experience a decrease in demand for their products until zero economic profit is again restored. b. new firms will enter the market, and the current firms will experience an increase in demand for their products until zero economic profit is again restored. c. some existing firms will exit the market, and the remaining firms will experience an increase in demand for their products until zero economic profit is again restored. d. some existing firms will exit the market, and the remaining firms will experience a decrease in demand for their products until zero economic profit is again restored.
If supply is unchanged, a rightward shift in the demand curve for gourmet ice cream will result in:
a) An increase in equilibrium quantity and a lower equilibrium price. b) A decrease in equilibrium quantity and a higher equilibrium price. c) A decrease in equilibrium quantity and a lower equilibrium price. d) An increase in equilibrium quantity and a higher equilibrium price.
If a monopoly can advertise and as a result the demand curve will become more inelastic, the monopoly
A) should always engage in the advertising. B) should engage in the advertising until the demand curve becomes more elastic. C) will earn higher gross profit if it advertises. D) None of the above.