Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country A would be using resources efficiently if it produced:
A. (500 iPods, 150 tablets).
B. (500 iPods, 250 tablets).
C. (500 iPods, 200 tablets).
D. (500 iPods, 100 tablets).
Answer: B
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If the CPI this year is 240 and the CPI last year was 217, the inflation rate from last year to this year was
A) 1.11%. B) 9.0% C) 10.6%. D) 23%.
Government deficit financing is made easier by a rise in inflation when inflation ________ the private sector's demand for high-powered money, which the government can ________
A) lowers, create and spend B) lowers, obtain through taxation C) raises, create and spend D) raises, obtain through taxation
As a firm hires more workers, holding the amounts of capital and other inputs constant,
A) output increases at a decreasing rate. B) output increases at a constant rate. C) output increases for a while and then decreases. D) output increases, but we can't be certain whether output increases at an increasing or a decreasing rate.
According to the substitution effect, an increase in the price of oranges will: a. cause consumers to consume fewer apples because more money is spent on oranges
b. cause consumers to spend more on oranges because a higher price signals that oranges are better than apples. c. cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges. d. leave consumers with less money to spend on all goods.