If marginal product is less than average product, then
A. marginal product must be decreasing.
B. average product must be increasing.
C. marginal product must be increasing.
D. marginal product could either be increasing or decreasing.
Answer: A
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The production possibilities curve is: a. a graph that shows the combinations of output which are most profitable to produce
b. a graph that shows the various combinations of output it is possible for an economy to produce given its available resources and technology. c. a graph that shows the various combinations of resources that can be used to produce a given level of output. d. a curve that shows the quantity of output that will be offered for sale at various prices.
There is a recessionary gap when
A. equilibrium GDP is equal to full employment GDP. B. equilibrium GDP is smaller than full employment GDP. C. equilibrium GDP is larger than full employment GDP. D. None of the choices are correct.
The income effect of a price increase for a Giffen good outweighs the substitution effect
Indicate whether the statement is true or false
The high growth rate in China in the last twenty years has similarities to the high growth rate of ________ during the 1950s and 1960s
A) the United States B) the Soviet Union C) Brazil D) Mexico