Which of the following is held constant when constructing a production possibilities curve?
A) the price level
B) the amount of total resources used
C) combination of goods produced
D) all of the above
Answer: B
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
A decrease in the cost of production will shift the supply curve down and to the right
Indicate whether the statement is true or false
To infer the political tendencies of the students at your college/university, you sample 150 of them. Only one of the following is a simple random sample: You
A) make sure that the proportion of minorities are the same in your sample as in the entire student body. B) call every fiftieth person in the student directory at 9 a.m. If the person does not answer the phone, you pick the next name listed, and so on. C) go to the main dining hall on campus and interview students randomly there. D) have your statistical package generate 150 random numbers in the range from 1 to the total number of students in your academic institution, and then choose the corresponding names in the student telephone directory.
Suppose a professor announces at the beginning of a course that he will give no failing grades because they are too damaging to self-esteem. How does such a policy affect equality and efficiency?