Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point D to Point B, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A. initially increases, then decreases.
B. increases.
C. remains constant.
D. decreases.
Answer: B
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Keynesians believe in
a. active management of structural deficits an minimal cyclical deficits. b. running structural budget deficits to stimulate output c. running large surpluses during expansions. d. active management of cyclical deficits and minimal structural deficits. e. both c and d.
Government spending on a transfer payment is illustrated by
a. interstate highways b. elementary and high school education c. community colleges d. land-grant universities e. agricultural subsidies
Assume that a country imposes a tariff in order to gain a price advantage on an item. What is the typical response from the exporting country?
a. It accepts the situation, and does nothing about it. b. It seeks greater efficiency in order to offset the tariff. c. It refuses to sell to the country that imposes the tariff. d. It retaliates by imposing tariffs or quotas on items from the other country.
The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000 . total variable cost to be $130,000 . and total revenue to be $145,000 . Because of this information, in the short run, the Brookside Racquet Club should
a. shut down. b. exit the industry. c. stay open because shutting down would be more expensive. d. stay open because the firm is making an economic profit.