The shape of the production possibilities curve in the figure above indicates that
A) production of corn is characterized by increasing costs while the production of cloth is characterized by decreasing costs.
B) production of both corn and cloth is characterized by increasing costs.
C) production of both corn and cloth is characterized by constant costs.
D) production of corn is characterized by constant costs and the production of cloth is characterized by increasing costs.
B) production of both corn and cloth is characterized by increasing costs.
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What did Adam Smith identify as the source of the invisible hand in 1776?
A) a benevolent central government that decided was best for everyone B) an individual's concern for fellow humans C) an individual's own self-interest D) the stock market E) buyers' and suppliers' concerns to obtain and retain good reputations
In the above figure, a recession begins at point ________ and an expansion begins at point ________
A) a; b B) b; c C) b; a D) d; c
Consumer goods that are produced, go into inventory, and are not sold during the current period are
a. counted as intermediate goods and so are not included in current period GDP. b. counted in current period GDP only if the firm that produced them sells them to another firm. c. included in current period GDP as inventory investment. d. included in current period GDP as consumption.
Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF
