Under monopoly
A. too small a share of society’s resources is used to produce the monopolized commodity.
B. Adam Smith’s invisible hand assures efficient resource allocation.
C. too large a share of society’s resources is being used to produce the monopolized commodity.
D. MC > MU.
Answer: A
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Which of the following distinguishes a "straight-line" production possibilities curve from one that is "bowed out"?
a. A straight-line production possibilities curve exhibits increasing opportunity costs, whereas a bowed production possibilities curve does not. b. A straight-line production possibilities curve exhibits decreasing opportunity costs, whereas a bowed production possibilities curve does not. c. A straight-line production possibilities curve exhibits constant opportunity costs, whereas a bowed production possibilities curve does not. d. A straight-line production possibilities curve is upward sloping, whereas a bowed production possibilities curve is not.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
Using expansionary policies to combat a recession would:
A. increase a budget deficit. B. increase a budget surplus. C. decrease discretionary spending. D. increase federal revenue.