If the government ran a major budget deficit, and there was no noticeable effect on the level of GDP, this could be taken as evidence of
a. Laffer curve effect.
b. structural deficit.
c. crowding-out.
d. monetary policy ineffectiveness.
C
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The expansion of capital that can occur in the long-run but not, by definition, in the short-run, means that the long-run supply is
a. perfectly horizontal while the short-run supply curve is upward sloping. b. sloping downwards while the short-run supply curve is upward sloping. c. less elastic than the short-run supply curve. d. more elastic than the short-run supply curve.
Suppose the United States' production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis. We now learn that the German mark sharply depreciates against the U.S. dollar. We now know that
A) the United States has no comparative advantage B) Germany has a comparative advantage in butter. C) the United States has a comparative advantage in butter. D) Germany has a comparative advantage in widgets. E) Germany has lost its comparative advantage.
Which of the following is true of a monopoly? a. Consumers fare better under a monopoly than under perfect competition. b. The output produced by a monopoly is allocatively efficient
c. Producer surplus is higher under monopoly than under perfect competition. d. The deadweight loss caused by a monopoly market structure is zero.
Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X, ceteris paribus.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis of Table 1.3, the lowest opportunity cost for combs in terms of brushes is
A. 0.33 brush per comb. B. 10 brushes per comb. C. 2 brushes per comb. D. 8.5 brushes per comb.