"As output of one good expands, the opportunity cost of producing additional units of this good increases," is the law of _____________.
Fill in the blank(s) with the appropriate word(s).
increasing costs
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
If an investment project costing $2,800 was expected to yield $1,000 (to be received at year end) for each of the next three years, a profit-maximizing entrepreneur would
a. definitely undertake the project. b. never undertake the project. c. undertake the project if the interest rate was low enough. d. undertake the project if the interest rate exceeded 12 percent.
The primary use of development assistance is to
A. encourage economic development through low-interest loans. B. restrict the outflow of foreign direct investment. C. invest in natural resources. D. allow developing countries imitate rather than innovate technologies.
Future shortages in natural resource markets are not expected to occur widely due to:
A. Reduced hours at work B. Reduced population growth C. Higher standards of living D. Higher per capita consumption