Which of the following correctly describes the relationship between productivity growth, unemployment, and the economy's production possibilities frontier?
A) An increase in productivity moves the economy from inside the production possibilities set to its frontier.
B) An increase in productivity shifts the economy from the production possibilities frontier to a point outside the production possibilities set.
C) An increase in unemployment shifts the economy further inside its production possibilities set.
D) An increase in unemployment shifts the economy from a point outside the production set back to the production possibilities frontier.
E) A reduction in unemployment shifts the entire production possibilities frontier outward.
C
You might also like to view...
When supply increases and the supply curve shifts to the right, equilibrium price ________ and equilibrium quantity ________
A) increases; decreases B) decreases; decreases C) increases; increases D) decreases; increases
Even when the demand for one good is high, the price of the good is also affected by supply. The textbook illustrates this by comparing the price of two items that were auctioned on the same day
Which of the following describes the results of the auction? A) A letter written by Abraham Lincoln sold for a higher price than a letter written by John Wilkes Booth. B) A letter written by John Wilkes Booth sold for a higher price than a letter written by Lee Harvey Oswald. C) A letter written by Abraham Lincoln was sold for a higher price than a letter written by Adam Smith. D) A letter written by John Wilkes Booth sold for a higher price than a letter written by Abraham Lincoln.
Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?
A) They feel that doing so will minimize their chances of being unemployed. B) They don't correctly perceive the costs of being so specialized. C) It allows them to earn more income by being more productive. D) They are unaware of how much better off they would be if they diversified their skills.
The strategy profile in which both players remain silent in the Prisoners' Dilemma can be described as:
a. non-Pareto optimal and unstable. b. Pareto optimal and unstable. c. non-Pareto optimal and stable. d. Pareto optimal and stable.