If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that:
A. it is impossible to produce more consumer goods.
B. resources cannot be reallocated between the two goods.
C. it is impossible to produce more capital goods.
D. more consumer goods can only be produced at the cost of fewer capital goods.
Answer: D
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During the Great Depression fiscal and monetary policy was characterized by
a. an increase in tax rates and a contraction in the money supply. b. a decrease in tax rates and a contraction in the money supply. c. a decrease in tax rates and an expansion in the money supply. d. an increase in tax rates and an expansion in the money supply.
As we move upward along a linear demand curve, the price elasticity of the demand:
A. increases. B. decreases. C. remains the same. D. increases up to the midpoint and then decreases.
Which of the following represents the effects in period t of an increase in the saving rate in period t?
A) no change in K/N B) no change in Y/N C) a reduction in C/N D) all of the above
Refer to the diagram. If labor is the only variable input, the marginal product of labor is at a:
A. maximum at point a.
B. minimum at point a.
C. maximum at point b.
D. minimum at point b.