Will depletable resources such as oil, coal, and aluminum be exhausted if their prices are left to the market?
No. As supplies decrease, price will rise. This will reduce quantity demanded, in line with the remaining, but more difficult to extract, supplies. For example, oil was depleted in the continental United States before turning to Alaska. Similarly, Britain only developed North Sea oil as the price rose.
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A curve that shows the various combinations of goods and services that are possible for an economy to produce with a given amount of resources is referred to as a(n):
A) supply curve. B) isocost curve. C) budget constraint. D) production possibilities curve.
Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion,
net exports of goods and services was $5 billion, and investment was $2 billion. Hence total expenditure was A) $24.5 billion. B) $34.5 billion. C) $36.5 billion. D) $34 billion. E) undetermined without information about imports.
According to the circular-flow diagram, GDP
a. can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
b. can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
c. can be computed as either the revenue firms receive from the sales of goods and services or the payments firms make to factors of production.
d. can be computed as the payments firms make to factors of production, but not as revenues they receive from the sales of goods and services.
Table 14.1Table 14.1 represents 3 markets for used computers. Which of the markets in Table 14.1 are in equilibrium?
A. 1 only B. 2 only C. 3 only D. 2 and 3