If an economy is operating at a point outside the PPC, either the society has resources that are not being fully used or production is not efficient
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose a competitive market with adverse selection has settled into a pooling equilibrium where everyone is offered the same price. If firms then screen consumers, the outcome may and may not be more efficient.
Answer the following statement true (T) or false (F)
Adam Smith wrote that the:
a. government should control the economy. b. public or collective interest is not promoted by people pursuing their self interest. c. pursuit of private self interest promotes the public interest in a market economy. d. economic problems of eighteenth-century England were caused by free markets.
Figure 11.3Figure 11.3 shows demands and costs for a monopolistically competitive firm. When the firm's demand curve shifts from D1 to D2 and to D3:
A. the demand for the firm's product is decreasing. B. the firm's average cost of production is increasing. C. the firm's marginal revenue curve also shifts to the left. D. All of these
Majority voting fails to incorporate the strength of the preferences of individual voters, and therefore:
A. Reduces the power of the median voter B. Is the primary reason for public sector failure C. May produce economically inefficient outcomes D. Creates the opportunity for the fallacy of limited decisions