If the United States decides to convert automobile factories to tank production, as it did during World War II, but finds that some auto manufacturing facilities are not well suited to tank production, then
A. Increasing opportunity costs will occur with greater tank production.
B. The production possibilities curve between tanks and automobiles will appear as a straight line.
C. The production possibilities curve between tanks and automobiles will shift outward.
D. Decreasing opportunity costs will occur with greater automobile production.
Answer: A
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Which of the following is associated with an increase in the average price level?
a. A decrease in the aggregate quantity demanded b. An increase in the aggregate quantity demanded c. A leftward shift of the aggregate demand curve d. A decrease in the aggregate quantity supplied e. Aggregate quantity demanded remains unchanged but the aggregate expenditures curve shifts leftward.
The decisions of buyers and sellers that affect people who are not participants in the market create
a. market power. b. externalities. c. profiteering. d. market equilibrium.