As we move along a production possibilities curve and acquire larger and larger amounts of one good (e.g., guns), the sacrifices of the alternative good (e.g., butter) become larger and larger. This is an illustration of
A. the law of demand.
B. the law of supply.
C. decreasing opportunity costs.
D. increasing opportunity costs.
D. increasing opportunity costs.
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How are banks and venture capital firms different?
A. Banks are financial intermediaries. B. Banks receive funds from the suppliers of capital. C. Venture capital firms expect quite a few of their investments to fail. D. Venture capital firms provide funds to businesses.
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.
Which of the following is consistent with long-run equilibrium for a perfectly competitive market?
A. Average variable costs of production are maximized. B. Economic profits are positive. C. Average total costs of production are maximized. D. Maximum technical efficiency is achieved.
Some economists see monopolies as inevitable, but not necessarily bad. They recommend a policy of
a. regulating prices b. nationalization c. laissez-faire d. encouraging concentration e. splitting up the monopoly