The production possibilities frontier represents all desirable combinations of outputs
a. True
b. False
B
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The figure above shows the market for coffee. If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the market is
A) efficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost. B) efficient because the total social benefit from coffee exceed the total social cost. C) inefficient because the marginal social benefit from the last pound of coffee exceeds its marginal social cost. D) inefficient because the marginal social cost of the last pound of coffee exceeds its marginal social benefit.
The Baker Plan for addressing the debt crisis was based on the assumption that
A) most countries would eventually default on their debt. B) forgiveness of some of the debt was inevitable. C) renewed lending by U.S. and European banks would undermine push for economic reforms. D) hyperinflation would eventually reduce the real value of the debt. E) renewed lending by U.S. and European banks would restore growth and make the debt manageable.
For investors, commercial paper is a close substitute for
A) U.S. Treasury bills. B) U.S. Treasury bonds. C) corporate bonds. D) municipal bonds.
A common tool for restricting trade through quantity is:
A. a tariff. B. immigration restrictions. C. international waters use policies. D. import quota.