When an economy is operating under conditions of full employment, the production of more of commodity A will mean the production of less of commodity B because:
A. of the law of increasing opportunity costs.
B. economic wants are insatiable.
C. resources are limited.
D. resources are specialized and only imperfectly substitutable.
Answer: C
You might also like to view...
Job is a smoker. He has a utility function for cigarettes smoked in bars (q1 ) and a composite good (q2 ) given by U(q1,q2 ) = 10q1.5 + q2 Job's income is $100 and faces prices p1 = 5 and p2 = 1. The government is planning to ban smoking in bars
Compute the compensating variation.
_____ when net taxes are reduced
a. Net exports decrease b. Government purchases remain constant c. Government purchases rise d. Consumption falls e. Consumption rises
When the Fed announces that it is raising the federal funds rate, this signals its intention to _______ bonds in the open market and _______ the money supply.
A. Buy; reduce B. Buy; increase C. Sell; reduce D. Sell; increase
The graph above shows cost curves for a perfectly competitive firm. The firm will break even if price is:
A. $2 B. $3.90 C. $6 D. $5