Answer the following statements true (T) or false (F)
1. If society has over-allocated resources to a particular activity, then the marginal benefits of the activity would be less than the marginal costs.
2. A nation's production possibilities curve shows the maximum combinations of resources that a nation can use.
3. A reduction in the unemployment rate will cause the nation's production possibilities curve to shift outwards.
4. Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.
1. Answer: False
2. Answer: False
3. Answer: False
4. Answer: False
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Describe the automatic stabilizers that are lost to a country that fixes its exchange rate to another currency.
What will be an ideal response?
Market power is the power to:
A. control prices. B. gain another firm's customers. C. reduce price below cost to deter entry. D. control output.
According to behaviorial economists, traditional economic models assume all the following characteristics EXCEPT
A) unbounded selfishness. B) unbounded resources. C) unbounded willpower. D) unbounded rationality.
In the above graph, unit elasticity would occur at approximately point _____.
A. A
B. B
C. C
D. D