If an economy is fully utilizing its resources, it can produce more of one product only if it
A. doubles manufacturing of the product.
B. adds more people to the labor force.
C. reduces the price of the most expensive products.
D. produces less of another product.
Answer: D
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In the Classical model, high unemployment ________.
A. occurred when the equilibrium GDP was too low B. could last for a long period of time C. would cause wages to fall D. required government intervention to reduce it
According to the policy irrelevance proposition, monetary policy can affect real variables
A) in the short run only, and then only if the policy was fully anticipated. B) in both the short run and the long run. C) in the short run only, and then only if the policy was unanticipated. D) in the long run only.
If this pollution occurs, the market equilibrium with no government intervention extracts ________ natural gas than the efficient quantity and ________ a deadweight loss
A) less; does not create B) more; does not create C) less; creates D) more; creates
A firm will exit a competitive market when
A) costs force the marginal cost curve to shift to the left. B) the long-run profit would be negative. C) it can earn only earn a zero long-run profit. D) Both B and C.