Explain the difference between short-run capacity utilization and long-run growth in terms of the PPC.
What will be an ideal response?
Short-run recovery occurs because of increased use of existing capacity. It can be illustrated by a movement from inside the PPC to a point closer to or on the PPC. Long-run growth occurs because of increased capacity. It can be illustrated by a rightward shift of the PPC.
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The amount of deposits that banks must hold in reserve is
A) excess reserves. B) required reserves. C) total reserves. D) vault cash.
In a Crown colony
a. both its governor and upper house were appointed by the Crown. b. the governor was appointed by the Crown while the upper house was elected by the propertied adult males within the colony. c. only the lower house could initiate fiscal legislation. d. Both a and b are correct. e. Both a and c are correct.
In a budget line, an increase in income is represented graphically by:
A. a rightward parallel shift of the budget line. B. a change in the slope of an indifference curve. C. a leftward parallel shift of the budget line. D. a change in the slope of the budget line.
Refer to Scenario 13.2 below to answer the question(s) that follow. SCENARIO 13.2: The government of Stratospheria is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P=55-0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR=55-0.02Q. Fun Cable Company is interested in bidding for the right to provide cable service in Stratospheria. It has a constant average and marginal cost of $5 for providing cable service to each household.Refer to Scenario 13.2. At what level of output (number of households) is Fun Cable Company's total revenue maximized?
A. 2,500 B. 2,750 C. 5,000 D. Indeterminate from the given information.