Refer to the information provided in Figure 34.4 below to answer the question(s) that follow.
Figure 34.4Refer to Figure 34.4. The demand and supply of pounds are D2 and S1. A decrease in British demand for U.S. exports, ceteris paribus, could
A. increase the equilibrium quantity from 300 to 400 pounds.
B. decrease the exchange rate ($/pound) to $1.50.
C. increase the exchange rate ($/pound) to $2.00.
D. increase the demand for pounds from D2 to D1.
Answer: C
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An increase in total factor productivity shifts the PPF
A) upward, but does not change its slope. B) upward, and also changes its slope. C) downward, but does not change its slope. D) downward, and also changes its slope.
If the price of cotton used in making blue jeans increases, which of the following will occur?
A) There will be a movement along an unchanged supply curve for jeans. B) The supply curve for jeans will shift rightward. C) The supply curve for jeans will shift leftward. D) There will be a rightward shift in the supply curve for jeans, followed by a movement along the supply curve.