In the figure above, potential GDP equals
A) $15.5 trillion.
B) $16.0 trillion.
C) $16.5 trillion.
D) None of the above answers is correct.
B
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When we compare the records of the CPI and the PCE price index over time, the
A) two are very different in magnitude. B) PCE price index tends to exceed the CPI. C) CPI tends to exceed the PCE price index. D) two measures are identical. E) CPI tends to exceed the PCE price index when inflation is high, and the PCE price index tends to exceed the CPI when inflation is low.
When the price of raisins falls, the quantity of raisins demanded rises. Explain this change in terms of income and substitution effects
What will be an ideal response?
Marginal rates of technical substitution (MRTS) represent
A) the optimum combinations of inputs. B) cost-minimizing combinations of inputs. C) the degree to which one input can replace another without output changing. D) All of the above
The Principle of Increasing Opportunity Costs states that:
A. opportunity costs increase when too little is produced. B. when increasing production, resources with the lowest opportunity costs should be used first. C. productive people do the hardest tasks first. D. when increasing production, resources with the lowest opportunity costs should be used last.