The production possibilities frontier rotates outward along one of the axes when:
a. there is a technological change that enhances the production of both goods.
b. there is a decrease in the availability of resources used to produce both goods.
c. there is a decrease in the quality of resources used to produce both goods.
d. there is a technological change that enhances the production of only one of the goods.
d
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The U.S. dollar will appreciate in value if
A) the demand curve for U.S. dollars shifts rightward. B) the demand curve for U.S. dollars shifts leftward. C) the supply curve of U.S. dollars shifts rightward. D) Americans choose to buy more foreign goods.
Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect the:
a. demand for honey to increase. b. demand for honey to decrease. c. quantity demanded of honey to decrease. d. price of honey to decrease. e. quantity demanded of honey to increase.
A negative side of long-term contracts is:
A. high transaction costs. B. the continual need to renegotiate the contract. C. a loss of flexibility. D. None of the statements is correct.
Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:
A. Gertie should buy the jeans because the price is less than her reservation price. B. Gertie should buy the jeans because the price is more than her reservation price. C. Gertie should not buy the jeans because the price is not equal to her reservation price. D. Gertie should not buy the jeans because they will be of lower quality than she expected.