The development of new technology typically:
a. shifts the supply curve to the right.
b. reduces profits.
c. results in a downward movement along a supply curve.
d. increases costs of production.
e. shifts the demand curve to the right.
a
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If the price of airline travel in Europe falls and the demand for train travel in Europe also falls, then the two goods are
A) complements. B) normal goods. C) substitutes. D) inferior goods.
Suppose that real GDP is initially $13 trillion and the government attempts to increase real GDP to $14 trillion
The marginal propensity to consume is 0.75, and every $1.00 increase in real government spending crowds out $0.50 in real planned investment expenditures. How much increase in real government spending could lead to the desired level of real GDP? A) $200 billion B) $250 billion C) $500 billion D) $1 trillion
The difference between zero accounting profit and zero economic profit is that
A. an economic profit of zero indicates a fair rate of return because it includes the opportunity cost of a firm’s capital. B. an economic profit of zero indicates an unacceptable rate of return because it does not include the opportunity cost of a firm’s capital. C. an economic profit of zero indicates more than a fair rate of return because it includes opportunity cost and explicit cost. D. an accounting profit of zero indicates a fair rate of return because it includes the opportunity cost of a firm’s capital.
The consumption function illustrates that:
a. saving increases as disposable income decreases. b. consumption increases as saving increases. c. consumption increases as disposable income increases. d. consumption increases as disposable income decreases. e. consumption increases as investment increases.