If the production possibilities curve is a straight line:
a. opportunity costs increase as output of either commodity is expanded
b. resources are not equally substitutable between the production of the goods.
c. opportunity costs are negative.
d. as an increasing quantity of resources are shifted from one manufacturing process (good Y) to another (good X), there is no increase in opportunity cost.
d
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"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?
What will be an ideal response?
Over the past year, productivity grew 2%, capital grew 1%, and labor grew 1%. If the elasticities of output with respect to capital and labor are 0.2 and 0.8, respectively, how much did output grow?
A) 1% B) 2% C) 3% D) 4%
If people refused to use banks to create checkable deposits, the banking system would:
a. not be affected in the money creating process. b. not have a way to loan out excess reserves. c. be able to expand the money supply by more than the money multiplier indicates. d. not be able to create new money. e. not be able to find new borrowers.
Refer to the graph shown. An effective price ceiling at Pc causes producer surplus to:
A. fall from areas A + B + E to area A. B. fall from areas C + D + F to area D. C. change from areas C + D + F to areas B + C + D. D. change from areas A + B + E to areas A + B + C.