Production possibilities frontiers curve when they are charted on a graph because they show:
a) the underutilization of resources
b) the maximum output of goods and services
c) the increasing costs resulting in increasingly less output
d) the technological level of the economy's productivity
Ans: c) the increasing costs resulting in increasingly less output
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If Safeway reduced its grocery prices below cost in a particular metropolitan area and kept them there until all other grocery stores in the area had been forced into bankruptcy, Walmart would almost certainly sustain huge net losses
A) in the short run and the long run because grocery stores would reappear quickly when Walmart subsequently set high prices. B) in the short run but not in the long run because it could charge very high prices afterward. C) in the short run but not in the long run because the policy would lower Walmart's costs of buying from suppliers. D) only if the government enforced the antitrust laws in a fair and even-handed way.
Suppose the demand curve for a product is vertical and the supply curve is upward sloping. If a per-unit tax is imposed in the market for this product
A) buyers share the burden of the tax with government. B) the tax burden will be shared equally between buyers and sellers. C) sellers bear the entire burden of the tax. D) buyers bear the entire burden of the tax.