Which of the following best describes how consumers and potato farmers in Spudville might be affected by imports of low-cost potatoes from Potato Town?
a. Prices fall in Spudville, but those losses are balanced by gains in Potato Town.
b. Potato prices drop, which is helpful for consumers but a challenge for farmers.
c. Potato farmers and consumers in Spudville both benefit from the cheap imports.
d. Potato prices rise, but losses to consumers are offset by the benefits to farmers.
b. Potato prices drop, which is helpful for consumers but a challenge for farmers.
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Which of the following characterizes the market that Chipotle competes in?
A) "Fast-casual" restaurants sell identical products. B) All "fast-casual" restaurants face horizontal demand curves. C) Barriers to entry are low. D) There are a small number of firms.
If a firm experiences increasing returns to scale at all levels of output: a. the slope of its long-run total cost curve is everywhere negative
b. the slope of its short-run average cost curve is everywhere negative. c. the slope of its long-run average total cost curve is everywhere negative. d. the slope of its production function is everywhere negative.
After spending $400,000 to build your dream home, you recently discovered that after less than one year the foundation is cracking. Further investigation reveals that the contractor used substandard concrete. Is there a role for the public sector in this situation?
Figure 2-7
Which of the following could explain the shift in the production possibilities frontier shown in from AC to AB?
a.
technical improvements in both petroleum and clothing production
b.
a productive improvement in clothing production that has no effect on petroleum production
c.
a decrease in the size of the labor force that can produce either petroleum products or clothing
d.
major oil reserves in Alaska are declared off-limits to producers in order to protect the environment
e.
major oil reserves are discovered off the coast of Africa