Refer to the graph. Growth of production capacity is shown by the:
A. shift from AB to CD.
B. shift from CD to AB.
C. movement away from point A and toward point B.
D. movement away from point B and toward point A.
A. shift from AB to CD.
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Which statement is true?
A. The entire expansion from the trough to the peak is the recovery phase. B. The entire contraction from the peak to the trough is the recession phase. C. Recessions never last more than one year. D. Prosperity is the first phase of expansion.
A profit-maximizing firm will continue to expand output:
a. as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit. b. until the average cost of producing the good or service is at a minimum. c. as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit. d. until the marginal cost of producing a good or service is at a minimum.
Suppose that an individual consumes just two goods: Big Macs and milkshakes. In order to reach consumer equilibrium, the individual must arrange the consumption of Big Macs and milkshakes so that the:
a. marginal utility of the two goods is equal for the last dollar spent on each good. b. ratio of marginal utility to price is the same for both goods for the last dollar spent on each good. c. ratio of marginal utility of milkshakes to the marginal utility of Big Macs is 1 for the last dollar spent on each good. d. price paid for the two goods is the same.
Consternation Corporation has an agreement with its workers to index completely the wage of its employees using the CPI. Consternation Corporation currently pays its production line workers $7.50 an hour and is scheduled to index their wages today. If the CPI is currently 130 and was 125 a year ago, the firm should increase the hourly wages of its workers by
a. $0.04. b. $0.29. c. $0.30. d. $0.50.