Consider two countries, Estonia and Ukraine. Estonia devotes a larger portion of its production to capital. All other things equal, which of the following statements is most likely true?
A. Ukraine is producing inside its production possibility frontier, whereas Estonia is producing at a point on its production possibility frontier.
B. Estonia will move up its production possibility curve faster than Ukraine.
C. Estonia's production possibility frontier will shift up and out farther and faster than Ukraine's.
D. Estonia is a poorer country than Ukraine.
Answer: C
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Suppose a monopolist sells 10,000 units of output at $22 per unit. The firm's total revenue is
A) $2,200. B) $22,000. C) $220,000. D) $2,200,000.
Falling interest rates can
A) increase a firm's stock price, which causes firms to issue more stock shares, and thus increases funds for investment. B) raise the cost of borrowing for firms and decrease investment. C) raise the cost of buying new homes and fewer new homes will be purchased. D) lower the cost of buying new homes and fewer new homes will be purchased.