Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point A to Point D. This could be explained by
A. an increase in economic growth.
B. a change in society's preferences for motorcycles versus hybrid cars.
C. a reduction in unemployment.
D. an improvement in technology.
Answer: B
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Refer to Figure 2-2. At Point A in the production possibilities graph shown above, the economy:
A. is not using its resources efficiently. B. is using its resources efficiently while producing clothing but no food. C. is using its resources efficiently while producing food but no clothing. D. is using its resources efficiently to produce both food and clothing.
When the domestic currency buys fewer units of foreign currency, the
A) nominal exchange rate rises. B) nominal exchange rate falls. C) real exchange rate rises. D) real exchange rate falls.
Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. According to the share-the-gains, share-the-pain theory, we would expect
A) prices to increase by a little immediately and profits to decrease by a lot. B) there will be some increase in price but not immediately. C) no increase in price. D) a quick increase in price maintains profits in the industry.
When a monopolist practices price discrimination, compared to a single-price monopolist, deadweight loss will:
a. decrease. b. increase initially, and then return to its original level. c. remain the same. d. increase.