Suppose that both nominal GDP and prices double. We can conclude that real output:
A. doubled.
B. fell.
C. more than doubled.
D. remained constant.
Answer: D
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If a rise in the price of good 1 decreases the quantity of good 2 demanded
A) the cross elasticity of demand is negative. B) the cross elasticity of demand is positive. C) good 1 is an inferior good. D) good 2 is an inferior good.
Which of the following economic conditions cause export growth to be a basis for faster overall economic growth?
A) Diseconomies of scale in production for the domestic market B) A larger-than- average service sector C) A larger-than-average manufacturing sector D) High and constant levels of productivity in export production E) Economies of scale in production for the world market
An effluent fee is imposed on a steel firm to reduce the amount of waste materials that it dumps in a river. Use the following two statements to answer this question:
I. The more easily factors of production can be substituted for one another (for example, capital can be used to reduce waste water), the more effective the fee will be in reducing effluent. II. The greater the degree of substitution of capital for waste water, the less the firm will have to pay in effluent fees. A) Both I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) Both I and II are false.
One possible benefit of a monopoly is:
a. a more efficient allocation of resources; only one firm is needed to supply quantity demanded. b. greater incentives for research due to long-run positive economic profits. c. the government is better able to ensure that it follows laws and guidelines because there is only one firm to monitor. d. goods and services are provided at a lower price than under perfect competition because of a monopoly's decreasing average cost curve.