Production is efficient when
A. the economy cannot produce more of one good without giving up the production of another good.
B. technological change occurs.
C. it generates a point beyond the production possibility curve.
D. the maximum amounts of the most important good are produced.
Answer: A
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Suppose the economy is at a short-run equilibrium GDP that lies above potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?
A) Unemployment will decline. B) Output will increase. C) Prices will decline. D) Short-run aggregate supply will shift to the left.
Producer surplus is the sum of the profits earned by all firms in a market
Indicate whether the statement is true or false
(Consider This) Payout rates for state lotteries:
A. are considerably lower than payout rates from casinos. B. are considerably higher than payout rates from casinos. C. are roughly equal to the payout rates from casinos. D. cannot be compared with casino payout rates because states do not typically disclose their payout rates.
An example of acquired comparative advantage is that
A. some U.S. consumers prefer German cars over American cars because German cars have a reputation for being very safe. B. the U.S. government provides a subsidy to firms that are trying to increase their exports to other countries. C. China specializes in the production of labor-intensive goods because of the amount of labor available in the country relative to capital. D. the United States imports coffee beans because coffee beans cannot be grown in the United States.