If a firm decreases its plant size and finds that its long-run average costs have decreased, then
A) the firm should reduce its plant size even more. B) its labor is more productive in a smaller plant.
C) its diseconomies of scale are less. D) the firm is now profitable.
C
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In 2006, Jan and Lou bought a house for $100,000. After a year, they still owed $98,000, but the home was worth $220,000, so they used it as collateral to get a $90,000 loan to buy a boat. What have they done?
a. taken out a hybrid loan b. bought a mortgage-backed security c. borrowed against their equity d. entered a subprime mortgage
If increasingly more units of good Y must be given up as each successive unit of good X is produced, then the PPF for these two goods is
What will be an ideal response?
Suppose the demand for rental apartments decreased substantially. We would expect to observe
A. no change in rent and a sharp reduction in quantity supplied in the short run, and an even larger decrease in quantity supplied in the long run. B. a small decrease in quantity supplied and significantly lower rents in the short run, and quantity supplied to decrease much more in the long run. C. a large decrease in quantity supplied in the short run and the long run, but much larger reductions in rent in the long run. D. a large decrease in quantity supplied in the short run, followed by a counter-reaction and an increase in quantity supplied in the long run.
How will an interest rate increase in the United States affect equilibrium in the market for dollars against foreign currencies? (Assume the exchange rate is stated in terms of foreign currency per U.S. dollar.)
A) The equilibrium exchange rate will increase, and the equilibrium quantity of dollars traded cannot be determined. B) The equilibrium exchange rate will decrease, and the equilibrium quantity of dollars traded cannot be determined. C) The equilibrium exchange rate cannot be determined, and the equilibrium quantity of dollars traded will increase. D) The equilibrium exchange rate will increase, and the equilibrium quantity of dollars traded will increase.