Answer the following questions true (T) or false (F)
1. An increase in population shifts the production possibilities frontier inwards over time.
2. If additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be linear.
3. On a production possibilities frontier, opportunity cost is represented by the slope of the production possibilities frontier.
1. FALSE
2. TRUE
3. TRUE
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At full employment there still exists some unemployment because
A) some portion of our population will always be too lazy to work. B) there are always people too old or young to be in the labor force. C) the U.S. economy is constantly creating and destroying jobs. D) it is unnatural to have all people work 40 hours per week. E) real GDP can never exceed potential GDP.
A decrease in the wage rate causes
A) a decrease in labor's productivity. B) a rightward shift of the firm's labor demand curve. C) a leftward shift of the firm's labor demand curve. D) an increase in the quantity of labor demanded.
Many economists consider medical care a superior good. Which of the following statements is true regarding a superior good?
a. Consumers want more of a superior good regardless of its price. b. When the price of a superior good increases, consumers demand more of it. c. As consumer income increases a larger percentage of that income is spent on superior goods. d. A superior good has an income elasticity of demand greater than one. e. Both c and d are true of superior goods.
Computer forecasting models have
a. been able to forecast changes in the growth rate of real GDP with considerable accuracy. b. had only limited success predicting turns in key economic variables such as real GDP. c. been able to accurately forecast the future direction of inflation but not real GDP. d. been able to accurately forecast the future direction of real GDP but not inflation.