As Sam moves rightward along his indifference curve, his marginal rate of substitution
A) is diminishing.
B) is increasing.
C) remains constant.
D) shows the change in his income.
A
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One of the most obvious clues to the relative scarcity of a product is
A) the limited selection of colors. B) the quality of the product. C) the variations in available sizes. D) its current market price.
Economic theory looks at social coordination as a process of
A) continuing mutual adjustments to the situations created by the actions of others. B) continuous adjustment of extremes to conform to the average. C) passing information up from below and instructions or commands down from above. D) sacrificing personal interest to the public or general interest. E) sacrificing the public interest to self-interest.
The production possibilities frontier bows outward because
A) opportunity costs are decreasing as the production of a good increases. B) opportunity costs are increasing as the production of a good increases. C) opportunity costs are fixed as the production of a good increases. D) resources are of uniform quality.
It is important to distinguish investment expenditures from consumption expenditures because
A) households invest and business firms consume. B) foreign firms invest and domestic firms consume C) investment, not consumption, increases the natural real GDP. D) consumption, not investment, increases natural real GDP.