Use the following figure to answer the question below.
The production possibilities frontier in the figure above satisfies the law of
A. zero trade-off.
B. a single good production.
C. zero opportunity cost.
D. constant opportunity costs.
Answer: D
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The growing post-war (1945–50) economy was sustained by
(a) an expansion of government expenditures. (b) the general expansion of nearly all sectors despite the decline in government expenditures. (c) significant increases in both government and private expenditures. (d) trade deficits.
The Gramm-Rudman-Hollings Act of 1985 was designed to set a timetable to
a. reduce the national debt to zero b. replace the progressive income tax with a flat-rate tax c. make Social Security fiscally sound d. replace the Social Security tax with a value-added tax e. reduce deficit spending
If the supply of a product increases, then we would expect equilibrium price
a. to increase and equilibrium quantity to decrease. b. to decrease and equilibrium quantity to increase. c. and equilibrium quantity to both increase. d. and equilibrium quantity to both decrease.
Two goods are complements if:
A. an increase in the price of one good leads to an increase in demand for the other. B. there are no substitutes for either of them. C. people tend to consume either one or the other. D. an increase in the price of one good leads to a decrease in demand for the other.