If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, the opportunity cost of producing 5 tractors is _______ bicycles.
A) 5
B) 20
C) 100
D) 125
Ans: D) 125
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Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico in 2005. This drove up the prices of natural gas, gasoline, and heating oil. This is an example of a
A) supply shock. B) demand shock. C) negative externality. D) depression.
The birthrate in the United States decreased during the 1960s, and as a result
A) structural and frictional unemployment increased. B) cyclical unemployment declined. C) cyclical unemployment increased. D) the natural rate of unemployment declined.
As inflation rates increase, borrowing and lending contracts tend to
a. increase in size. b. decrease in size. c. decrease in length of time. d. increase in length of time.
Refer to the graph shown. Holding cost conditions constant, if the monopolistically competitive firm represented were suddenly to find itself in a perfectly competitive market, the long-run equilibrium price would adjust to:
A. $6. B. $8. C. $4. D. $7.