One explanation for the drop in the standard of living in the Soviet Union during World War II is that
a. the war led to a movement along its production possibilities frontier away from civilian goods and towards military goods
b. the war led to an outward shift in the production possibilities frontier due to a rise in the level of technology
c. prior to the war, there was much productive inefficiency in the Soviet Union
d. the opportunity cost of producing military goods was zero in their economic system
e. resources used to produce civilian goods were equally capable of producing military goods
A
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When Sidney's Sweaters, Inc makes exactly zero economic profit, Sidney, the owner
A) is taking a loss. B) will shut down in the short run. C) makes an income equal to his best alternative forgone income. D) will boost output.
Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase. b. Both the equilibrium wage and quantity decrease. c. The equilibrium wage increases, and the equilibrium quantity decreases. d. The equilibrium wage decreases, and the equilibrium quantity increases.