Which one of the following will not cause the production possibilities curve to shift outward?
a. improvements in the stock of land
b. increased educational opportunities
c. a very low birth rate
d. increased entrepreneurial activity
c
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A person has a comparative advantage in an activity whenever he or she
A) has an absolute advantage in the activity. B) can perform the activity at a lower opportunity cost than can anyone else. C) can do the activity in less time than anyone else. D) can do everything better than anyone else.
If company Z is receiving a government subsidy, the government is taking money from ____________ and giving it to company Z. If company Z is getting a tax deduction (instead of receiving a subsidy) then company Z is ______________________
A) taxpayers; paying more in taxes than it would without the tax deduction B) taxpayers; subsidizing the taxpayers C) Congress; paying more in taxes than it would without the tax deduction D) taxpayers; paying less in taxes than it would without the tax deduction
Given a fixed amount of time, a decision to supply labor or not is simultaneously a decision to
A. demand goods and services or not. B. demand leisure or not. C. supply capital and land or not. D. supply leisure or not.
Figure 9.5Figure 9.5 shows the short-run and long-run effects of an increase in demand of an industry. The market is in equilibrium at point A, where 100 identical firms produce 6 units of a product per hour. If the market demand curve shifts to the right, which of the following statements is true in the long run?
A. The market price drops below $12 as more firms enter the market and build more plants. B. Both existing firms and new firms earn a zero economic profit. C. All firms in the industry maximize their profits by producing the output where the marginal cost equals $10. D. All of these are correct.