During the 1980s both the relative price and the purchases of BMWs increased dramatically. In the economic way of thinking,
A) the supply curve of BMWs shifted to the right.
B) the demand curve for BMWs shifted to the right.
C) the supply curve of BMWs shifted to the left.
D) the demand curve for BMWs shifted to the left.
B
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Textbook examples of trade between two nations are simplified in order to show how two nations both benefit from trade. These examples are misleading because
A) some individuals in both countries may be made worse off because of trade. B) trade restrictions are likely to be imposed as trade grows over time. C) they do not account for the reduction in wages that occurs in both countries as a result of trade. D) in the real world, rich countries can take advantage of poor countries.
Generally, positive externalities result in
A. too much of a good being produced. B. the socially optimal output of a good being produced. C. too little of a good being produced. D. either a or c E. any of the above
Which of the following economic theories share(s) the noninterventionist policy conclusions of the original classical theory?
a. The Keynesian theory b. The monetarist theory c. The new classicist theory d. Both b and c e. All of the above
The perfectly competitive, profit-maximizing rate of production
A) occurs at the point at which marginal revenue is equal to marginal cost. B) occurs at the point at which the difference between marginal revenue and marginal cost is maximized. C) is not measurable for a perfectly competitive firm. D) ignores the relation of total revenues and total costs.