Which one of the following would cause an increase in the supply of planes?
A) a decrease in the demand for planes
B) an increase in the price of planes
C) an increase in taxes applied to plane producers
D) an improvement in the technology used to produce planes
Answer: D
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When a market has barriers to entry,
A) then in the long run it is possible for the firms to incur economic losses. B) then in the long run the only possible outcome for the firms is zero economic profit. C) then in the long run it might be possible for the firms to make economic profits. D) oligopolies cannot be created. E) the HHI almost always falls below 1,000.
A technological improvement can cause the production possibilities curve to shift outward because
A) it increases costs and contributes to lower production rates. B) maximum feasible outputs of both goods increase. C) production will fall, but jobs will be saved. D) it causes increases in unemployment.
Figure 15-3
As shown in , if people behave according to rational expectations theory, an increase in the aggregate demand curve from AD1 to AD2 will cause the price level to move
a.
directly from 100 to 105 and then remain at 105.
b.
directly from 100 to 110 and then remain at 110.
c.
from 100 to 105 initially and then eventually move back to 100.
d.
from 100 to 105 initially and then eventually move to 110.
Taxes are the difference between
A. GDP and net exports. B. GDP and consumer spending. C. consumer spending and saving. D. GDP and disposable income.