Inefficiency occurs when an economy is operating outside its production possibilities curve.

a. true
b. false


Ans: b. false

Economics

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The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle is called

A) the mean (or average) voter theorem. B) the median voter theorem. C) the voting paradox. D) the Arrow impossibility theorem.

Economics

What are three reasons that banks charge interest on loans?

What will be an ideal response?

Economics

In the above figure, market equilibrium at point E yields the quantity X. The quantity is the socially optimal quantity. Point E indicates that currently there is

A) a negative externality. B) a positive externality. C) a public good. D) a positive externality with subsidy.

Economics

Figure 2-9



Assume that the publishing industry produces novels and textbooks, as shown in the production possibilities frontier in . Moving from point H to G, the opportunity cost of those five additional textbooks equals
a.
0.5 novels
b.
10 million novels
c.
3 novels
d.
8 novels
e.
2 novels

Economics