A country's indifference curve describes combinations of goods that:
a. a country can purchase.
b. yield equal satisfaction to a country.
c. yield satisfaction to a country.
d. a country can produce.
Answer: b. yield equal satisfaction to a country.
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A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. The country is currently running a financial account surplus. The imposition of the capital controls will cause
A) net exports to decrease. B) real domestic interest rates to rise. C) real world interest rates to rise. D) desired national saving to fall.
Refer to the above figure. Which panel shows the effect of an increase in the price of a good on the demand curve of that good?
A) Panel A B) Panel B C) both panels D) neither panel
Economists know that if consumers and producers are both made better off, they would be without free exchange because the exchanges are
A. able to make producers better off by an amount that compensates consumers for their losses. B. able to make consumers better off by an amount that compensates producers for their losses. C. voluntary. D. mandated by government.
Answer the following statement true (T) or false (F)
1) The real opportunity cost of producing product X is the amounts of products Y, Z, and so forth, that might have been produced if resources had not been used to produce X. 2) The short run is a period of time during which all costs are fixed costs. 3) Variable costs are costs that change directly with output. 4) Diseconomies of scale stem primarily from the difficulties in managing and coordinating a large-scale business enterprise. 5) At zero units of output a firm's variable costs are zero.