A reduction the amount of oil (a resource) will tend to cause which of the following?
A. an increase in the price level and no change in output if accompanied by an increase in the money supply
B. a reduction in output with no change in the price level
C. a reduction in output and an increase in the price level
D. a reduction in output and a reduction in the price level
Answer: C
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An automobile manufacturer voluntarily recalls certain models to fix a defective part at no cost to the owners. This action has the effect of
A) the lemon problem. B) a manufacturer's warranty. C) a market failure. D) none of the above
What did Harvard economist Edward Chamberlain say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost?
A) Chamberlain argued that these higher costs represent the wastefulness of this market structure. B) Chamberlain argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs. C) According to Chamberlain, this cost difference represents the value consumers place on variety and having more choice. D) In Chamberlain's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention.
In the above figure, the most efficient way to produce 15 units is to hire
A) 2 workers. B) 3 workers. C) 4 workers. D) 5 workers.
45° line diagrams show how
a. investment varies with income. b. expenditures vary with income. c. investment spending rises when GDP rises. d. GDP is affected by government purchases.