In the 1980s, the federal government undertook a major build-up of the military sector, leading to reports that prices charged by military contractors were spiraling upward. According to production possibilities analysis, this result is not surprising due to:
A) the law of increasing opportunity cost.
B) economic efficiency.
C) technical efficiency.
D) resource underutilization.
Ans: A) the law of increasing opportunity cost.
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The money demand curve will shift to the right if:
A. ATM machines are introduced. B. real income increases. C. the nominal interest rate increases. D. the price level decreases.
Moving along a short-run aggregate supply curve, resource prices ________, the money rate wage ________, and potential GDP ________
A) do not change; changes; does not change B) do not change; does not change; changes C) change; does not change; does not change D) do not change; does not change; does not change
What is the best example of the federal government using regulation to control pollution?
a. implementation of the gasoline tax b. vehicles required to have catalytic converters c. a consumer who installed a filter on his wood furnace d. a toll assessed on certain bridges
Veruca sells therapeutic bath salts on the Internet. Her annual revenue is $52,000 per year, the explicit costs of her business are $14,000, and the opportunity costs of her business are $17,000 per year. What is her accounting profit?
A) $14,000 B) $21,000 C) $31,000 D) $38,000