Horatio can produce either a combination of 15 bird houses and 25 wind chimes or a combination of 30 bird houses and 15 wind chimes. If he now produces 30 bird houses and 15 wind chimes, what is the opportunity cost of producing an additional 10 wind
chimes?
A) 2 bird houses
B) 15 bird houses
C) 30 bird houses
D) 45 bird houses
Answer: B
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A) Given the information above, if full employment GDP were 2,000, would there be an inflationary gap or a recessionary gap? B) What two fiscal policy measures would you recommend to remove the gap?
Suppose there is a tornado that levels a city. As rebuilding begins, how might you analyze this effect in the market for lumber?
A. The demand for lumber would increase, increasing both the equilibrium price and quantity. B. The supply of lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity. C. The demand for lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity. D. The supply of lumber would decrease, increasing the equilibrium price and decreasing the equilibrium quantity.
Referring to Figure 18.3, the effect of an increase in Japanese interest rates is represented by a movement from point:
A. c to d. B. b to a. C. d to c. D. d to a.
Compared to a monopolist, the demand curve for a perfectly competitive firm will be
A) as elastic. B) more elastic. C) less elastic. D) perfectly elastic.