Briefly explain how capacity utilization rates are used by forecasters
What will be an ideal response?
Capacity utilization rate is the ratio of production to capacity. Higher capacity utilization rates give firms the incentive to expand capacity through investment in new structures and equipment. Forecasters estimate that the threshold level for capacity utilizations rates to be around 83 to 85 percent. Capacity utilization rates above this threshold suggest that businesses will increase investment in structures and equipment to expand capacity to meet expected demands for their products. Capacity utilization rates below this threshold suggest that businesses will cut back on capital spending and focus their attention on replacement of inefficient facilities.
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The political wisdom of choosing a tariff acceptable to the median U.S. voter is
A) a good example of the principle of the second best. B) a good example of the way in which actual tariff policies are determined. C) a good example of the principle of political negotiation. D) not evident in actual tariff determination. E) usually evident in actual tariff determination.
Suppose you are told that the equilibrium price of gasoline has increased, while the equilibrium quantity of gasoline has fallen. You are also told that either the demand changed or supply changed, but not both
Which of the following must have occurred? A) Demand increased. B) Demand decreased. C) Supply increased. D) Supply decreased.
Goods are distributed efficiently if everyone gets an equal share of each good.
Answer the following statement true (T) or false (F)
In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?
a. It would shift the supply curve to the right. b. It would shift the supply curve to the left. c. It would shift the demand curve to the left. d. It would shift the demand curve to the right.