The economy could reach point W if it
A. reduced the unemployment rate.
B. achieved economic growth.
C. decreased its quantity of land, labor and capital.
D. shifted resources from butter production into the manufacturing guns.
B. achieved economic growth.
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Your friend Harry has quit his $20,000-a-year job to start a business that rents fishing boats. He asks you to lend him $50,000 and agrees to pay you a 10% return on your $50,000 if he earns a profit
During the first year Harry's total revenue is $120,000 and his total cost for equipment and supplies are $100,000 . Harry tells you that he cannot pay you any interest this year because he did not earn a profit. Is your friend Harry trying to cheat you?
Patents stimulate innovation by
a. providing incentives to incur research and development costs b. guaranteed profits for those who innovate c. prosecuting anyone who purchases the good protected by the patent d. providing tax breaks to investors e. increasing the interest rate on borrowed funds
Suppose the federal funds rate is 5 percent. If the Fed decides to decrease the target for the federal funds rate from 5 percent to 4 percent, it could take:
A. a defensive action and raise reserve requirements. B. an offensive action and reduce reserve requirements. C. an offensive action and raise reserve requirements. D. a defensive action and reduce reserve requirements.
For an imperfectly competitive firm:
A. total revenue is a straight, upsloping line because a firm's sales are independent of product price. B. the marginal revenue curve lies above the demand curve because any reduction in price applies to all units sold. C. the marginal revenue curve lies below the demand curve because any reduction in price applies to all units sold. D. the marginal revenue curve lies below the demand curve because any reduction in price applies only to the extra unit sold.