As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases.
B. initially decreases, then increases.
C. decreases.
D. initially increases, then decreases.
Answer: A
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How does a per-unit subsidy affect the simple monopoly equilibrium?
a. The subsidy does not affect marginal cost and thus does not affect the monopoly equilibrium. b. The subsidy lowers the price charged by the monopoly, but it also lowers social gain. c. The subsidy increases the monopoly's profit but does not improve social gain. d. The subsidy causes both monopoly output and social gain to increase.
Marginal resource cost is the change in total cost resulting from the production of an additional unit of output, other things constant
Indicate whether the statement is true or false
Consider the economic impact of Hurricane Florence in 2018. Which of the following statements is correct?
A. Spending toward reconstruction would lead to an increase in GDP. B. Increased government spending on relief efforts in the United States would decrease GDP. C. Damaged buildings and looting would lead to a decrease in GDP. D. U.S. well-being improves the more reconstruction efforts are needed, following the decline in GDP.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.