Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A. increases
B. remains constant.
C. initially increases, then decreases.
D. decreases.
Answer: A
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In the above table, the marginal product of the third worker is
A) 1. B) 2. C) 3. D) 4.
School vouchers can be used to arrive at the efficient market equilibrium because vouchers
A) increase demand for schooling. B) increase supply of schooling. C) decrease the cost of schooling. D) decrease supply of schooling.
This sequential game illustrates a
a. Third mover advantage b. Second mover advantage c. First mover advantage d. No advantage based on moves
On August 5, 2003, a tragic fire destroyed a large Jim Beam whiskey factory in Kentucky. Assume that the U.S. market for whiskey is perfectly competitive, and that the market was originally in long run equilibrium. What would be the effects of such an incident?
a. An increase in supply would cause a reduction in price, which would then lead to entry of firms. b. A decrease in supply would cause an increase in price, which would then lead to entry of firms.` c. An increase in supply would cause an increase in price, which would then lead to entry of firms d. A decrease in supply would cause an increase in price, which would then lead to exit of firms. e. Price of the whiskey would remain unchanged and the existing firms would continue to earn zero economic profit.