An inefficient use of resources can be illustrated using a production possibilities curve as:
a. a movement to the northeast along the curve
b. a movement to the southeast along the curve.
c. a movement off the curve in a northeast direction.
d. a movement off the curve in a southwest direction.
d
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The level of output at which all economies of scale have been exhausted is known as
A) constant returns to scale. B) optimal economic size. C) minimum efficient scale. D) the economically efficient output level.
Assume the price of pizza decreases. As a result, your real income increases and you increase the quantity of pizza purchased each month. This is an example of the:
a. substitution effect. b. income effect. c. revenue effect. d. consumer price effect.
The typical economic life cycle illustrates how people tend to
a. borrow more when they are younger and save more when they are middle-aged. b. earn their peak incomes immediately prior to the typical retirement age of 65. c. adjust their consumption based on changes in their transitory income. d. All of the above are correct.
If the equilibrium level of real Gross Domestic Product (GDP) is less than the full-employment real Gross Domestic Product (GDP) consistent with the position of the economy's long-run aggregate supply (LRAS) curve, then the difference between full-employment real Gross Domestic Product (GDP) and current equilibrium real Gross Domestic Product (GDP) is
A. an aggregate demand shock. B. a recessionary gap. C. an aggregate supply shock. D. an inflationary gap.