With regard to the characteristics of production indifference curves, which of the following statements is/are NOT true?
A. Higher curves correspond to larger outputs.
B. An indifference curve will generally have a negative slope.
C. An indifference curve is typically assumed to curve inward toward the origin near its middle.
D. All of the responses are true for production indifference curves.
Answer: D
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If the IS curve is negatively sloped and the LM curve is positively sloped
A) an increase in government expenditures will raise real GDP and lower interest rates. B) a fall in the real money supply will raise real GDP and lower the interest rate. C) an increase in taxes and an increase in money supply will lower the interest rate and give little or no change in real GDP. D) an increase in taxes and a fall in the money supply will raise the interest rate and give little or no change in real GDP.
Rational utility maximizing consumers tend to:
A. choose the same bundle of goods regardless of their income. B. change their consumption choices when either prices or income changes. C. buy the same bundle of goods regardless of the prices charged. D. change their consumption choices only when both prices and income changes simultaneously.
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.
Positive net exports are treated like domestic investment in the national income accounts because they are
A) always part of inventories. B) fixed assets not intended for resale. C) they represent future flows of real income. D) not intended for resale.