A typical economy produces thousands of different goods. Is it accurate to say that society faces a production possibilities frontier?
A. No, because two dimensions cannot capture the complexity of a full economy.
B. No, although a graph with several thousand dimensions would be appropriate.
C. Yes, although society does not face opportunity cost and the model does not apply.
D. Yes, because scarcity always imposes opportunity costs.
E. Uncertain, economic theory has no answer to this question.
Answer: D
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The market for unskilled labor is illustrated in the figure above. The market is in equilibrium and then a minimum wage of $5 per hour is imposed. Employment will fall by
A) 0 hours. B) 10 million hours per year. C) 20 million hours per year. D) 30 million hours per year.
Which of the following could be the price elasticity of demand for a good for which an increase in price would decrease revenue?
a. 0.6 b. 0.9 c. 1 d. 2.6
Assuming that labor is the only variable input, if society values a good ________ it costs firms to hire the workers to produce that good, the good ________ be produced.
A. equal to what; will not B. less than; will C. more than; will D. more than; will not
A cash payment made by the government to people who do not supply goods, services or labor in exchange for the payment is a(n)
A. "in kind" payment. B. budget deficit. C. dividend payment. D. transfer payment.