Refer to the figure above. In autarky equilibrium, the relative price is given by the slope of the production possibility frontier at point
A) D.
B) E.
C) F.
D) Can't answer without more information.
B
You might also like to view...
During the expansion phase of the business cycle, business firms become optimistic about their future earning capacity as do banks. Nominal interest rates rise during expansions. Investment lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest rates. B) stay the same. C) fall. D) fall if the change in future earnings is thought to be greater than the change in interest rates.
According to the quantity theory of money,
a) the quantity of money determines the long run equilibrium price level b) the amount of money in the economy determines the long run quantity of output c) money affects the aggregate supply curve, while the aggregate demand curve determines real output d) the money supply only affects the economy in the long run, not in the short run e) the full-capacity level of output determines the supply of money needed in the economy
If a person is entertained by gambling, then
A) she is not risk averse. B) she does not understand the concept of a fair game. C) she may gamble even if it is an unfair game. D) she will definitely not buy automobile insurance.
The government announces a tax increase on workers' wages to take effect in the future. What happens to current employment and the real wage rate?
A. Both employment and the real wage rate would increase. B. Both employment and the real wage rate would decrease. C. Employment would increase and the real wage would decrease. D. Employment would decrease and the real wage would increase.