Which of the following is not true about a production possibilities curve? It indicates
a. what combinations are attainable and unattainable
b. efficient combinations of the goods produced
c. which combinations are inefficient
d. which combinations of goods and services can be produced
e. the actual combination produced
E
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The first economist to point out the importance of specialization of labor was
a. Leonardo da Vinci. b. Adam Smith. c. David Ricardo. d. John Maynard Keynes. e. Enrico Caruso.
Although asset price bubbles seem obvious after the fact, it is much more difficult to draw such a conclusion before the fact
a. True b. False Indicate whether the statement is true or false
A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units of output in order to maximize profit. The firm is currently producing 200 units in the Michigan factory and 300 units in the Texas factory. At this allocation between plants, the last unit of output produced in Michigan added $5 to total cost, while the last unit of output produced in Texas added $3 to total cost. If the firm produces 201 units in Michigan and 299 units in Texas instead:
A. total cost will decrease $2 B. total cost will decrease $3 C. profit will increase $2 D. both a and b E. none of the above
Suppose a central bank tries to keep exchange rates fixed. When there is an increase in the demand for foreign goods, the central bank will most likely
A) buy foreign currency in exchange for the domestic currency. B) do nothing. C) sell the domestic currency in exchange for foreign reserves. D) use foreign reserves to buy the domestic currency.