The position of the long-run aggregate supply curve is determined by
A. the interest rate effect.
B. the production possibilities curve.
C. the long-run aggregate demand curve.
D. the open economy effect.
Answer: B
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When the marginal social benefit of Good A is greater than the marginal private benefit of Good A, then
A) competitive, unregulated markets will produce a quantity of Good A that is less than the efficient quantity. B) competitive, unregulated markets will produce the quantity of Good A that is equal to the efficient quantity. C) competitive, unregulated markets will produce a quantity of Good A that is greater than the efficient quantity. D) the government should levy a tax on the production of Good A that is equal to the horizontal distance between the two marginal cost curves.
Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs. The shop earns $600,000 in revenues and has $1.1 million in net worth. Based on this information, what is accounting profit for Tommy's Teddy Bears?
A) $250,000 B) $300,000 C) $500,000 D) $1.35 million
Output combinations that lie inside the production possibilities curve are characterized by efficient use of resources.
Answer the following statement true (T) or false (F)
If the U.S. demand for German goods increases, then
A. the U.S. current account deficit with Germany will improve. B. Germany will experience currency devaluation. C. the euro will appreciate in value against the U.S. dollar. D. the euro will depreciate in value against the U.S. dollar.