The reason the production possibilities curve is bowed outward (concave) is
A) the law of increasing additional cost.
B) that technology is constantly changing.
C) that the number of resources is increasing.
D) that the economy has more capital goods than entrepreneurial effort.
Answer: A
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Traditionally, the Federal Reserve can give emergency loans only to
A. manufacturing firms. B. securities firms. C. commercial banks. D. investment banks.
For foreign direct investment to occur, the purchase has to be more than
A) 8 percent but less than 10 percent of shares in a business located abroad. B) 5 percent but less than 10 percent of shares in a business located abroad. C) 10 percent of shares in a business located abroad. D) 2 percent but less than 5 percent of shares in a business located abroad.
A computer manufacturer sells 1,000 units per month at $500 each. A price cut to $400 is being considered. His marginal cost is constant at $300 per unit. To maintain profits, quantity sold must increase to at least
A. 1,500 B. 2,000 C. 2,500 D. 3,000
Which of the following is most likely to generate a surplus?
A) a price floor B) a price ceiling C) an illegal market D) all of these