Figure 6.3 shows the cost structure of a firm in a perfectly competitive market. Assume the market price is $3 and the firm is currently producing 100 units. If the firm produces zero units in the short run, it will reduce its economic loss by:
A. $300.
B. $600.
C. $900.
D. $1,200.
Answer: A
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Figure 3-2
In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of
A. decreasing costs. B. increasing costs. C. demand. D. comparative advantage.
Moving along the short-run Phillips curve, as the unemployment rate increases, the inflation rate
A) initially increases and then decreases. B) remains unchanged. C) increases. D) decreases. E) initially decreases and then increases.
Refer to Figure 2-6. If the economy is currently producing at point E, what is the opportunity cost of moving to point D?
A) 10 thousand hammers B) 8 thousand wrenches C) 13 thousand hammers D) 0 wrenches
Money is used in an economy because: a. goods and services are produced in accordance with demand
b. the exchange of goods for money is less troublesome than barter. c. some goods or services are difficult to provide because of the scarcity of resources. d. some merchants may offer goods for a select clientele.