Ceteris paribus, if average prices in the U.S. economy fall, then the
A. Foreign trade effect will lead to a lower quantity of U.S. output demanded.
B. Cost effect will lead to a higher quantity of U.S. output demanded.
C. Real balances effect will lead to a lower quantity of U.S. output demanded.
D. Interest rate effect will lead to a higher quantity of U.S. output demanded.
Answer: D
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Which of the following is NOT related to the slope of isoquants?
A) The fact that inputs have positive marginal product B) The fact that inputs have diminishing marginal product C) The fact that input prices are positive D) The fact that more of either input increases output E) The fact that there are diminishing returns to inputs
Refer to the graph below.
If the production possibility curve shifts along the Good Y axis, which point will remain as a point of efficiency?
A. A B. B C. C D. D