Due to a mild winter, Florida experienced a bumper crop of oranges. This would best be represented by a(n)
A. movement down the U.S. production possibility frontier.
B. outward shift of the U.S. production possibility frontier away from the origin.
C. movement off the U.S. production possibility frontier to some point inside the frontier.
D. movement up the U.S. production possibility frontier.
Answer: B
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The text refers to OPEC as a classic example of a cartel. OPEC is a group of countries that collude to control prices and output in the _______ industry(ies)
a. agriculture b. engineering and computer c. airline d. oil e. machinery
On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?
a. The lack of a fireworks display in Yankeeville arises because of an externality. b. The lack of a fireworks display in Yankeeville arises because the free-rider problem does not apply to goods such as fireworks displays. c. In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately irrational. d. All of the above are correct.
The value of Austria's exports minus the value of Austria's imports is called
a. Austria's net exports. b. Austria's net imports. c. Austria's foreign portfolio investment d. Austria's foreign direct investment.
Which of the following is a true statement?
A. Firms and resource suppliers generally find it easier to reduce prices than to raise them. B. As the price level increases, interest rates will rise and therefore consumption and investment spending will also rise. C. An initial increase in aggregate demand may cause a further increase in aggregate demand because higher prices mean higher incomes. D. A decline in aggregate demand will primarily affect real output and employment if prices are inflexible downward.