Which of the following will shift the production possibilities curve outward?
a. a decrease in the market price of both goods
b. an increase in the unemployment rate
c. a hurricane that destroys buildings throughout Florida
d. an increase in the capacity utilization of existing factors
Answer: a. a decrease in the market price of both goods
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If net exports is a negative number, the government sector must ________ if the private sector is in a ________
A) run a surplus; surplus B) equal zero; deficit C) run a deficit; surplus D) The statement errs because the accounts are not related.
Mars Inc produces 100,000 boxes of Snickers bars which sell for $4 a box. If variable costs are $3 per box, and it has $150,000 fixed operating costs, in the short run, it should
A) shut down as fixed costs are not being covered. B) keep producing as profits are $50,000. C) keep producing as variable costs are being met. D) keep producing as total costs are being recovered.
A manufacturer will sell its product only to retailers who agree to buy its brand. This is an example of:
a. price discrimination. b. exclusive dealing. c. a tying contract. d. interlocking directorates.
A sharp depreciation of the domestic currency after a currency crisis leads to
A) higher inflation. B) lower import prices. C) lower interest rates. D) decrease in the value of foreign currency-denominated liabilities.