The various bundles of goods that a country can obtain by taking advantage of international trade is known as
A) the non-indifference curve.
B) the consumption possibility frontier.
C) the production possibility frontier.
D) the trade possibility frontier.
B
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The classical model is a poor predictor of short-run economic fluctuations in part because it assumes that
a. all workers wish to work b. government will prevent these fluctuations c. the labor market always clears d. the long run is just a series of short-run periods e. labor demand curve is stable
If the punishment is ________, or the likelihood of getting caught is ________, the cost associated with breaking a ban may not be high enough to change the trade-off that consumers face.
A. not severe; high B. not severe; low C. severe; high D. severe; low
Describe how a central bank can increase aggregate demand by influencing expectations
What will be an ideal response?
A village has five residents, each of whom has an accumulated savings of $50. Each villager can use the money to buy a government bond that pays 10% interest per year or to buy a year-old goat, send it onto the commons to graze, and sell it after one year. The price of the goat that the villager will get at the end of the year depends on the amount of weight it gains while grazing on the commons, which in turn depends on the number of goats sent onto the commons, as shown in the table below. Assume that if a villager is indifferent between buying a bond and buying a goat, the villager will buy a goat. Number of goatson the commonsPrice per 2-yearold goat ($)Income pergoat ($/year)180302752537020465155555 The villagers will buy a year-old goat if the goat can be sold for a price of at
least ________ when it is 2 years old. A. $65 B. $55 C. $75 D. $70