Producing at a point inside the production possibilities curve
A. Is feasible when the nation is at war but not feasible when the nation is at peace.
B. Suggests we are forgoing the ability to produce more of both goods.
C. Is unattainable given the present level of technology.
D. Means society must be using its resources efficiently.
Answer: B
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The study of individual choice and its implications for the behavior of prices and quantities in individual markets is:
A. macroeconomics. B. the Scarcity Principle. C. microeconomics. D. a normative economic principle.
Domestic producers might oppose free trade agreements because
A. there could be a decrease in producer surplus. B. there could be an increase in consumer surplus. C. there could be an increase in producer surplus. D. there could be a decrease in consumer surplus.
The demand curve for a typical good has
A. a negative slope because consumers purchase less of the good as the price rises. B. a negative slope because the supply of the good rises as demand rises. C. a negative slope because the good has less “snob appeal” as its price falls. D. a positive slope because as the price goes up, the good has more profitability. E. a positive slope because price is a clear indicator of need.
I) The growth rate of Eduland's money supply in a particular year was 8.5%
What was the growth rate of real GDP if the inflation rate in the same year was 4%? ii) What is likely to happen if the growth rate of money supply doubles in the following year, while the growth rate of real output remains unchanged?