Over a period of time, the equilibrium price of a good increases and the quantity decreases. All of the following could account for this situation, except:
A. An increase in the costs of production
B. The removal of a subsidy on the good or service
C. The imposition of a sales tax on the good or service
D. A decrease in the price of an alternative good or service that producers could also produce
D. A decrease in the price of an alternative good or service that producers could also produce
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Under a flexible exchange rate system, an increase in the value of the U.S. dollar in terms of other currencies is referred to as
A) a depreciation of the U.S. dollar. B) an appreciation of the U.S. dollar. C) a monetizing of the U.S. dollar. D) a devaluation of the U.S. dollar.
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Canada has the ________ opportunity cost of a pair of shoes than the United States, so: ________.
A. higher; Canada should specialize in apple production B. higher; Canada should specialize in shoe production C. lower; Canada should specialize in apple production D. lower; Canada should specialize in shoe production
Consider the following:
(i) Suppose the firm is in the short run, and consider the first stage of production. What happens to the average product of labor when the firm adds an additional worker? What causes this change in labor productivity? (ii) Repeat part i for the second stage of production.
What potential problem is there with rate of return pricing?
What will be an ideal response?