The production of 1,000 shirts leaves an apparel manufacturer with a capacity to produce no more than 1,100 trousers during a month. This implies:
a. the production level is inefficient.
b. that if the production of trousers is reduced, that of shirts will also decline.
c. that a reallocation of resources may make previously unachievable outcomes achievable.
d. the production level is efficient.
D
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As market price increases in the short run, a profit-maximizing firm in a perfectly competitive market will expand output along its:
a. marginal cost curve. b. average total cost curve. c. average variable cost curve. d. market demand curve.
What is government failure, and how would it be demonstrated on a production possibilities curve?
What will be an ideal response?
Paying interest on internal government debt involves a:
A. redistribution of income among citizens of the country. B. net increase in domestic income. C. net reduction in domestic income. D. redistribution of income to citizens of other countries.
A consumer has two basic choices: rent a DVD movie for $4.00 and spend 2 hours watching it, or spend $13 for a miniature golf game that takes 1 hour. If the marginal utilities of the movie and the miniature golf game are equal, and the consumer values time at $12 an hour, the rational consumer will most likely:
A. Rent the movie instead of playing miniature golf B. Play miniature golf instead of renting the movie C. Be indifferent between the movie and the miniature golf game D. Not have enough basis for making a utility-maximizing decision