Refer to the above figure. Which one of the following statements is TRUE with regard to the economy depicted in the graph?
A) Point C cannot be produced.
B) The best production point is 500 loaves of bread and 50 bales of wool.
C) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is more than the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.
D) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is the same as the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.
D
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The substitution of machines for labor
A) does not reduce employment opportunities because labor is required to produce the machines. B) is not likely to reduce employment opportunities because as many or more workers will usually be demanded to produce, service, and operate the machines. C) will proceed more rapidly in a society the more rapidly the cost of hiring workers rises. D) will reduce employment opportunities if increased competition associated with the introduction of machinery lowers product prices.
If the interest elasticity of money demand is -0.1, by what percent does money demand change if the nominal interest rate rises from 2% to 3%?
A) -0.1% B) 5% C) 0% D) -5%
The deadweight loss a tax causes depends on all of the following except:
A. how responsive buyers and sellers are to a price change. B. the price elasticity of supply. C. the price elasticity of demand. D. who the tax is imposed upon.
The branch of economics that attempts to understand the outcomes observed in the public sector by examining the incentives faced by the individual actors involved (such as voters, politicians, and bureaucrats) is known as
a. private choice analysis. b. public choice analysis. c. government operations analysis. d. incentive analysis.