Marginal costs will begin to rise at the point where
A. fixed costs increase.
B. variable costs increase.
C. diminishing marginal product begins.
D. average variable costs increase.
Answer: C
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If an industry has constant marginal and average costs, any shift in demand will eventually
A) result in a higher equilibrium price. B) be met by a smaller change in quantity supplied. C) be met by an equal change in quantity supplied, and equilibrium price will not change. D) make economic profits zero in the short run.
If the allocation of resources is efficient, then a market economy will maximize the difference between total utility and total cost.
Answer the following statement true (T) or false (F)
If the relative price of one unit of good X is 5 units of good Y, then it follows that the absolute price of good X can be __________ and the absolute price of good Y can be __________
A) $20,000; $10,000 B) $40,000; $8,000 C) $30,000; $5,0000 D) $5,000; $40,000 E) a and c
For this question, assume that the Marshall-Lerner condition does not hold. An increase in the real exchange rate will tend to cause which of the following to occur?
A) a reduction in NX and a reduction in Y B) a reduction in NX and an increase in Y C) an increase in NX and a reduction in Y D) an increase in NX and an increase in Y