If the contribution to output of an additional unit of the variable input exceeds the average contribution of the variable inputs used,
A. the average product will be at its minimum.
B. the average contribution must rise.
C. the total product will begin to decline.
D. the average contribution must fall.
Answer: B
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Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What will happen to the Canadian IS curve as a result of the leftward shift of the U.S. IS curve?
A) It will shift rightward. B) It will shift leftward. C) It will not change. D) The IS curve will show an increase.
Tariffs are frequently used in less-developed countries because _____
a. the governments need more revenue b. the governments want to encourage exports c. the governments find it easier to monitor border transactions than interior transactions d. the governments prefer to tax goods over services