Without drawing a graph explain what probably happened to the production possibility frontier during the Black Plague
What will be an ideal response?
The Black Plague killed off about one-third of the world's population during its rampage. This no doubt resulted in a decline in the labor force which pushed the production possibilities frontier inward.
Difficult: E
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Holding all else constant, an increase in Mexican real GDP will ________ the demand for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; decrease B. decrease; increase C. increase; increase D. decrease; decrease
The demand curve for a Giffen good slopes upward
Indicate whether the statement is true or false
The _____ tends to increase an individual's demand for leisure.
A. income effect of a wage decrease B. law of increasing marginal utility C. substitution effect of a wage increase D. income effect of a wage increase
Common property often results in
A) a negative externality. B) a social benefit. C) more efficient production of goods. D) exclusive rights of ownership.