Which of the following statements is true for both Microsoft and a locally owned restaurant?
A. Both confront perfectly elastic demand for their products.
B. Both are perfect competitors.
C. Neither firm is able to influence the price of their products.
D. Both seek to maximize profits.
Answer: D
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The existence of unemployment can be illustrated on a production possibilities curve by a(n)
A. point below or inside the surface of the curve. B. inward shift of the curve. C. movement along the curve. D. outward shift of the curve.
The discount rate is kept ________ the federal funds rate because the Fed prefers that ________
A) below; banks borrow reserves from each other B) below; banks borrow reserves from the Fed C) above; banks borrow reserves from each other D) above; banks borrow reserves from the Fed
A flat LM curve implies that
A) an increase in government spending will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in government spending and taxes will have a large multiple effect on output. D) A and B.
Use the above table. Assuming constant opportunity costs, the opportunity cost of producing donuts in country Alpha is ________, and the opportunity cost of producing donuts in country Beta is ________
A) 1 donut; 0.17 donut B) 1 donut; 6 donuts C) 10 donuts; 12 pizzas D) 0.2 pizza; 1.67 donuts