One point on a PPF shows production levels at 50 tons of coffee and 100 tons of bananas. Remaining on the PPF, an increase of banana production to 140 tons shows coffee production at 30 tons
Still remaining on the PPF, coffee production at 10 tons allows banana production at 160 tons. The opportunity cost of a ton of bananas is A) constant because coffee production decreased by the same amount each time.
B) decreasing, since the increase in banana production is less at each point considered.
C) 16 to 1, that is every 1 ton of coffee given up will result in 16 more tons of bananas.
D) increasing from 1/2 ton of coffee per ton of bananas to 1 ton of coffee per ton of bananas.
D
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An example of something that might be sold in the underground economy is:
A. lawn-mowing services. B. endangered animals. C. baby-sitting services. D. All of these could be exchanged in the underground economy.
Refer to Figure 7.6. Which graph represents decreasing returns to scale?
A. A
B. B
C. C
D. Both graph A and graph C
In a capitalist country most resources are owned by
A. business firms. B. households. C. the government.
Mainstream economists support:
A. Adoption of a monetary rule for increases in the money supply B. Elimination of efficiency wages and insider-outsider relationships C. The requirement that the government annually balance its budget D. The use of discretionary monetary and fiscal policy for achieving major economic goals