The economy was at point A producing 100X and 200Y. It then moves to point B where it produces 200X and 300Y. It follows that
What will be an ideal response?
point A may have been a point below the economy's PPF, while point B may lie on the PPF.
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Spreading risk involves:
A. adding assets to a portfolio that move independently. B. finding assets whose returns are perfectly negatively correlated C. investing in bonds and avoiding stocks during bad times. D. building a portfolio of assets whose returns move together.
Suppose that in a month the price of movie rentals decreases from $3.25 to $3. At the same time, the quantity of movie rentals demanded increases from 100 to 120. The price elasticity of demand for movie rentals (calculated using the midpoint formula) is:
A. zero. B. inelastic. C. unit elastic. D. elastic.
Suppose that the nation wide average cost of air pollution generated by a car is $1,000. Would a tax of $1,000 on every car induce people to take external costs into consideration and bring about the optimal price and output for autos? Explain
What will be an ideal response?
Refer to the above figure. The profit-maximizing price and output for this monopolist are
A. a price of P1 and output of Q1. B. a price of P4 and output of Q1. C. a price of P3 and output of Q3. D. a price of P2 and output of Q2.