A move from E to F represents
A. an increase in quantity demanded.
B. a decrease in quantity demanded.
C. an increase in demand.
D. a decrease in demand.
C. an increase in demand.
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If in a market the last unit of output was sold at a price higher than marginal cost,
A) producers are better off producing more. B) consumers are better off if less of the product is sold. C) social welfare is not maximized. D) the unit increased total profit.
Suppose that Honduras opens its markets to international trade. As a result of this, the domestic price of coffee decreases. We can conclude that
a. Honduras has a comparative advantage in the production of coffee.
b. Honduras has begun to import coffee into the country.
c. the price of coffee in Honduras prior to the opening of trade was lower than the world price.
d. Honduras should specialize in the production of coffee.
The production possibilities curve represents the set of all
A) nonlinear forms of production in the economy. B) combinations of goods and services that can be used in the production of other goods and services. C) factors of production that can be used to manufacture goods and services. D) feasible combinations of goods that the economy can produce given that a nation's resources are fully employed.
If the MPC is 0.9, and the government cuts spending by $200b, the overall effect on GDP will be:
A. a decrease of $2,000b. B. an increase of $2,000b. C. a decrease of $1,800b. D. an increase of $180b.