Which of the following is an example of creative destruction?
A. An economic recession forces firms out of business.
B. Automobile production causes the wagon industry to shut down.
C. Apple earns more economic profits than other manufacturers of MP3 players.
D. Starbucks shuts down stores to create greater demand for its remaining outlets.
Answer: B
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Moving upward along an LM curve, velocity ________ because ________ remains constant while ________ rises
A) rises, real balances, real income B) rises, the interest rate, the price level C) rises, the interest rate, real balances D) falls, real balances, real income E) falls, real income, real balances
Which of the following would fall under the "rule of reason doctrine?"
a. General Motors colludes with Ford to fix the price of their cars b. Coke and Pepsi collude to limit the quantity of soft drinks on the market c. Intel dominates the market for computer processors with a 95% market share d. Reynolds American, Inc. and Lorillard, Inc. agree to limit the introduction of new cigarette brands e. two local restaurants agree to increase their prices by 10%
Given an opportunity cost of 10 bicycles per 1 sewing machine in Germany and 20 bicycles per 2 sewing machines in Hungary,
a. Neither country has a comparative advantage in the production of either good. b. Germany has a comparative advantage in the production of sewing machines. c. Germany has an absolute advantage in the production of sewing machines. d. Hungary has an absolute advantage in the production of bicycles. e. Hungary produces more bicycles than Germany does.
For an inferior good, an increase in consumer incomes results in an increase in the quantity demanded of the good
a. True b. False Indicate whether the statement is true or false