Which of the following is one of the simplifying assumptions made in constructing a production possibilities curve?
A. The state of technology is constantly changing
B. A wide variety of products are produced
C. Resources are fully employed and are used in least-cost methods of production
D. Quantities of available resources in the economy vary from one point to another
Answer: C
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Due to a recent hurricane there is a major loss of sugarcane crops. At the same time in the U.S. consumers are eating healthier and cutting back on eating items that have sugar in them. How will this affect the price and quantity in the sugar market?
A. Price increases and quantity is indeterminate B. Quantity increases and price is indeterminate C. Quantity decreases and price is indeterminate D. Price decreases and quantity is indeterminate
The absolute price elasticity of demand for a product that has many good substitutes is probably
A) less than 1. B) greater than 1. C) equal to 1. D) infinity.
Because of recent corporate downsizing, Chuck loses his job. The most likely effect on his consumption function is a(n)
a. movement downward along the function. b. shift upward of the function. c. shift downward of the function. d. increase in consumption expenditures.
Although wages, incomes, and interest rates are most often discussed in real terms, what matters most are their nominal values.
a. true b. false