Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A. increases
B. remains constant.
C. initially increases, then decreases.
D. decreases.
Answer: A
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If there is a surplus of a good, the quantity demanded is ________ the quantity supplied, and the price will ________
A) less than; rise B) less than; fall C) greater than; rise D) greater than; fall E) equal to; fall
Suppose the shopkeeper is known to usher low bidders out of the store even if it means giving up the sale. If the customer moves first, he would
a. Offer the high price b. Offer the low price c. Get ushered out of the store d. All of the above
Government spending results from the provision of
a. private goods b. public goods c. merit goods d. redistribution e. all of the above
When total revenue minus total economic cost is greater than zero, the firm is
a. earning higher than normal profits. b. earning the normal profit rate. c. making economic losses. d. earning economic profit but accounting losses.