An economy's production possibilities are most likely to expand if
A. Gross investment is greater than depreciation.
B. Net investment is zero.
C. Net investment is negative.
D. Depreciation is greater than gross investment.
Answer: A
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What would happen to the budget line if income as well as prices of both goods increase by the same percentage?
A. A rightward parallel shift in the budget line B. A leftward parallel shift in the budget line C. A rightward shift in the budget line D. No shift in the budget line
Business cycles in the United States
A) tend to occur at regular intervals and are periodic. B) tend to recur at irregular intervals, but are usually of the same length. C) were quite common before World War II but have not occurred in the postwar period. D) tend to have expansions that last longer than the recessions.
If Ann's utility function is U = W0.5, and she invests in a business which can yield $6,400 with probability 1/5, and $3600 with probability 4/5, then her risk premium to avoid bearing this risk is
A) $36. B) $41.6. C) $64. D) $100.
In recent years, wireless cellular telephones have been replacing land-line phone service. This is an example of
What will be an ideal response?