If all resources were perfectly adaptable for alternative uses, the production possibilities curve would
A) be bowed out.
B) be bowed in.
C) be a straight line.
D) not exist.
C
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A market for pollution permits can efficiently allocate the right to pollute by using the forces of supply and demand
a. True b. False Indicate whether the statement is true or false
The self-correcting mechanism to return the economy to potential output from output gaps is the change in:
A. short-run aggregate supply. B. aggregate demand. C. the real interest rate by the central bank. D. potential output.
Most lighthouses are operated by the government because
a. of the free-rider problem. b. lighthouses are no longer valued by society. c. most lighthouses are only tourist attractions in state and national parks. d. shipping companies would not be able to afford maintenance fees for lighthouses.
Short-run decisions refer to the:
A. hourly, daily, or weekly decisions that firms have to make. B. decisions a firm has to make immediately to prepare for either entering or exiting an industry. C. immediate decisions that firms have to make that affect level of output, but not the production process. D. immediate decisions that firms have to make that affect the production process, not level of output.