Greater scarcity of a natural resource is indicated
a. by an increase in the price of the resource, whether the price increase is less than or greater than the rate of inflation.
b. only by an increase in the price of the resource that is less than the rate of inflation.
c. only by an increase in the price of the resource that is greater than the rate of inflation.
d. only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation.
c
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There are very few gasoline stations in the downtown areas of large cities basically because
A) it would be too dangerous. B) it would be an inefficient use of land for the land's owners. C) most people don't want to buy gasoline while they are downtown. D) zoning laws prohibit it.
In a period of rapid, unexpected inflation, resources can be lost
A) when firms invest in research and development instead of forecasting inflation. B) when firms use resources to forecast inflation. C) because rapid inflation almost always turns into a hyperinflation. D) Both answers B and C are correct.
If there are increasing returns to scale, then it makes sense to consolidate operations into one production facility
A) if production above domestic demand can be exported. B) only if the consolidation creates an absolute advantage versus other trading partners. C) if the government subsidizes production. D) Never, because then you lose the possibility of comparative advantage gains between the production facilities.
What impact did the change in housing prices during 2002 to 2005 have within the framework of the AD/AS model?
a. Declining housing prices reduced aggregate demand shifting AD leftward. b. Rising housing prices increased aggregate demand shifting AD rightward. c. Rising housing prices led to increased construction shifting LRAS leftward. d. Declining housing prices caused SRAS to shift leftward.