The main shortcoming of the market, in the view of many,
A. lies in the arena of justice and injustice.
B. lies in the area of consumer goods production.
C. is its inability to stimulate the creation of new products.
D. is its drag on growth in productivity.
Answer: A
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The negatively-sloped part of the long-run average total cost curve is due to which of the following?
A) Diseconomies of scale. B) Diminishing returns. C) The difficulties encountered in coordinating the many activities of a large firm. D) The increase in productivity that results from specialization.
Suppose that one-year Treasury bills yield 4 percent in the United States and 5 percent in Germany. Investors will be indifferent between them if they expect the dollar over the next year to
A) depreciate against the euro by approximately 1 percent. B) appreciate against the euro by approximately 1 percent. C) depreciate against the euro by exactly 20 percent. D) appreciate against the euro by exactly 20 percent.
In the short run, perfectly competitive firms will determine whether to continue producing the current output, reduce output, or increase output based on the relationship between
A. price and average cost. B. price and marginal cost. C. marginal revenue and average cost. D. average revenue and average cost.
India is not a member of the China-ASEAN (Association of South East Asian Nations) free-trade area implemented on January 1, 2010. As a result, India fears that some of its:
a. exports to China will be diverted to ASEAN countries. b. exports to the United States will be diverted to China. c. exports to China and to ASEAN countries will be diverted to trade among members of the China-ASEAN free-trade area. d. imports from ASEAN countries will be diverted to China.