Assume a good has a downward-sloping, linear demand curve. Starting at a price of zero, as the price of the good increases, total revenue
A. Is constant.
B. Increases, then decreases.
C. Decreases indefinitely because the quantity sold will decrease.
D. Increases indefinitely.
Answer: B
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Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?
A. (15 airplanes, 15 trucks)
B. (10 airplanes, 25 trucks)
C. (10 airplanes, 30 trucks)
D. (5 airplanes, 30 trucks)
ow does lowering the discount rate enable the Fed to stimulate the economy? How does raising the discount rate enable the Fed to control too robust an economy?
What will be an ideal response?
As a percentage of GDP, U.S. exports are:
A. greater than U.S. imports. B. about 20 percent. C. considerably lower than in several other industrially advanced nations. D. higher than in Canada but lower than in Germany.
According to the law of diminishing returns, when some factors of production are fixed, in order to increase production by a given amount, a firm will eventually need to add successively:
A. smaller and smaller quantities of the variable factors of production. B. larger and larger quantities of the fixed factor of production. C. larger and larger quantities of the variable factors of production. D. constant quantities of the variable factors of production.