A production possibilities frontier for two outputs is drawn assuming that:
a. opportunity cost is fixed, but the quantity and quality of resources changes.
B. both outputs use the same quantity of each resource, but the technology differs.
C. the amount of resources currently available for production is fixed.
D. the technology available can only be applied to producing one of the outputs.
Ans: C. the amount of resources currently available for production is fixed.
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
One indication that an industry might be oligopolistic is that prices change
A. infrequently. B. frequently. C. in rhythmic patterns. D. on a regular, periodic basis.
When estimating a short-run average variable cost function,
A. the intercept must be forced to equal zero. B. the cost data must be inflation-adjusted. C. at least one input must have been constant during the period in which the data were collected. D. both b and c E. all of the above
Favored customers receive special treatment from dealers during periods of excess demand.
Answer the following statement true (T) or false (F)