If the domestic income of a nation’s citizens increase thus causing consumption spending to increase, then we generally expect net export spending to:
A. increase as well because as consumption increases we also buy more foreign goods and services.
B. decrease as well because as consumption increases we also buy more foreign goods and services.
C. remain constant because when we increase domestic purchases it is directly offset by a reduction in foreign purchases.
D. there is not enough information to determine what would happen.
B. decrease as well because as consumption increases we also buy more foreign goods and services.
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Producing leather creates external costs in the form of water pollution. The figure above illustrates the market for leather. If the government sets a pollution limit that achieves efficiency, how many tons of leather are produced?
A) 0 tons B) 200 tons C) 300 tons D) more than 300 tons E) more than 0 tons and less than 200 tons
If freezing weather in Florida destroys a large portion of the current orange crop,
A) prices of Florida oranges will rise and quantity demanded will fall. B) the supply of and the demand for Florida oranges will both fall. C) the demand for Florida oranges will fall and prices will rise. D) the supply of Florida oranges will decline but not the quantity demanded.
Since the demand curve faced by a monopolistically competitive firm is downward sloping,
a. the firm is a price-taker in the short run b. in the long run there will be excess capacity c. the output decisions of one firm will influence profits of all other firms d. the product in the market is viewed by consumers as being standardized e. the ATC curve is U-shaped
The CPI does not reflect the increase in the value of the dollar that arises from the introduction of new goods
a. True b. False Indicate whether the statement is true or false