Refer to the above figure. For a normal good, the rightward shift of the curve could have been caused by
A. a decrease in income.
B. a technological improvement.
C. an increase in the cost of inputs.
D. an increase in income.
Answer: D
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The term "economic growth" refers to increases in
A) resources use. B) productive capacity. C) nominal income. D) satisfaction.
Suppose that a bond promises to pay its holder $100 a year forever. If the price of the bond increases from $1,000 to $1,250, then the interest rate on the bond
A) falls from 10 percent to 8 percent. B) rises from 8 percent to 10 percent. C) does not change because it is not affected by the price of the bond. D) falls from 10 percent to 6 percent.
The principle of comparative advantage implies that
A) only wealthy countries ultimately can benefit from international trade. B) every country can benefit from international trade. C) we should limit the extent to which people specialize. D) most people are harmed by trade.
For a perfectly competitive firm, marginal revenue product is equal to:
a. the difference between marginal revenue and marginal cost. b. the product price multiplied by total output. c. the change in total product arising from a unit change in resource usage. d. marginal product multiplied by product price.