Use the figure below to answer the following question.
The diagram shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S3?
A. a decrease in the price of wheat
B. an increase in the cost of maintaining the equipment used in wheat farming
C. an increase in the number of acres of farmland allocated to wheat
D. a decrease in the cost of maintaining the equipment used in wheat farming
Answer: B
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In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice has ________ advantage in producing ________
A) an absolute; shoes B) a comparative; shoes C) an absolute; bookshelves D) a comparative; bookshelves
Other things the same, an increase in the U.S. interest rate causes U.S. net capital outflow to
a. rise, so supply in the market for foreign-currency exchange shifts right. b. rise, so demand in the market for foreign-currency exchange shifts right. c. fall, so supply in the market for foreign-currency exchange shifts left. d. fall, so demand in the market for foreign-currency exchange shifts left.
Some environmentalists have criticized tradable emission allowances on the grounds that they give permit holders a license to pollute. Furthermore, environmentalists argue that those who sell their permits receive a monetary benefit from their
contribution to polluting the environment. Use economic reasoning to evaluate this criticism. What will be an ideal response?
When the economy strengthens, following the period of quantitative easing, the Federal Reserve plans to keep a lid on money growth by
A. selling dollars in foreign-exchange markets. B. increasing the interest rate paid on reserves. C. buying dollars in foreign-exchange markets. D. increasing reserve requirements.