What is an example of the scale effect?
A. Workers choose to provide more hours of labor when the wage rate decreases.
B. The firm expands output when production costs increase.
C. The firm hires more labor as long as the marginal product of labor is positive.
D. The firm hires more labor when the wage falls because labor has become relatively cheaper compared to the price of other factors of production.
E. The firm expands output when production costs fall.
Answer: E
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Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's risk level rises relative to England and nothing else changes, then
a. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate. b. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing an appreciation of the Swiss franc. c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc. d. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. e. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc.
The endpoints of an economy's production possibilities frontier (PPF) for goods X and Y are: (2,000X, 0Y) and (0X, 500Y). Furthermore, the opportunity cost between these two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's PPF?
A) 400 units of X and 200 units of Y B) 600 units of X and 250 units of Y C) 400 units of X and 150 units of Y D) 1,000 units of X and 250 units of Y E) 300 units of X and 150 units of Y
Refer to the above figure. If the marginal cost curve for pollution abatement shifts to the right, everything considered, the
A. the marginal cost of pollution abatement has nothing to do with air quality. B. degree of air quality or cleanliness will also decrease. C. the degree of air quality or cleanliness will stay unchanged. D. the degree of air quality will improve.
Countries with different initial levels of per capita income may gravitate to a similar level of per capita income. Economists call this phenomenon ________
A) convergence B) simulation C) gravitation D) depreciation