Using Figure 1.5 above, we know the production of 6 units of soda and 2 units of pizza is 
A. possible, but only if all resources were fully employed.
B. undesirable.
C. possible, but there would be unemployed resources.
D. impossible because we either do not have the resources or the technology.
Answer: D
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In general, large current account deficits have to be financed by:
A) capital outflows abroad. B) capital inflows from abroad. C) trade barriers. D) none of the above.
Which of the following events would lead to an increase in the marginal product of labor for every quantity of labor?
A) An increase in the real wage B) A decrease in the real wage C) A favorable supply shock such as a fall in the price of oil D) An adverse supply shock, such as a reduced supply of raw materials
When output is greater than the economy's long-run capacity, which of the following is most likely to occur?
a. a reduction in the general level of prices b. an abnormally high rate of unemployment c. increases in real interest rates and real resource prices d. a reduction in imports
Which of the following is not an example of a positive, as opposed to normative, statement?
a. Higher gasoline prices will reduce gasoline consumption. b. Equality is more important than efficiency. c. Trade restrictions lower our standard of living. d. If a nation wants to avoid inflation, it will restrict the growth rate of the quantity of money.