Refer to the diagrams. The solid lines are production possibilities curves; the dashed lines are trading possibilities curves. The trading possibilities curves suggest that the terms of trade are:
A. 1.5 beers for 1 pizza.
B. 1 beer for 2 pizzas.
C. 2 beers for 1 pizza.
D. 1 beer for 1.5 pizzas.
D. 1 beer for 1.5 pizzas.
You might also like to view...
If Congress authorized the President to lower tax rates or to initiate spending projects when aggregate demand was inadequate, which consequence could be predicted most confidently?
A) Aggregate spending would be more stable over time. B) Recessions would be less severe. C) Recessions would occur less frequently. D) The political power of the President would increase. E) We would experience a lower rate of inflation.
Economic efficiency requires that
a. individuals produce at their maximum level. b. only long-lasting, high-quality products be produced without regard to cost. c. income be distributed equally among consumers. d. all economic activity generating more benefits than costs be undertaken.
Your boss gives you an increase in the number of dollars you earn per hour. This increase in pay makes
a. your nominal wage increase. If your nominal wage rose by a greater percentage than the price level, then your real wage also increased. b. your nominal wage increase. If your nominal wage rose by a greater percentage than the price level, then your real wage decreased. c. your real wage increase. If your real wage rose by a greater percentage than the price level, then your nominal wage also increased. d. your real wage decrease. If your real wage rose by a greater percentage than the price level, then your nominal wage decreased.
When Stanley has an income of $1,000 . he consumes 30 units of good A and 50 units of good B. After Stanley's income increases to $1,500, he consumes 60 units of good A and 45 units of good B. Which of the following statements is correct?
a. Both goods A and B are normal goods. b. Both goods A and B are inferior goods. c. Good A is a normal good, and good B is an inferior good. d. Good A is an inferior good, and good B is a normal good.