Suppose a production possibilities frontier (PPF) has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point inside the PPF represents:
a. a larger quantity of capital goods than that represented by a point along the PPF.
b. an inefficient output combination of the two goods in
the economy.
c. an unattainable output combination of the two goods in the economy.
d. an output combination of more consumer goods than capital goods.
e. a larger quantity of consumer goods than that represented by a point along the PPF.
b
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According to the production function, as the quantity of labor employed increases, real GDP increases
A) at an increasing rate. B) at a decreasing rate. C) at a constant rate. D) and then eventually decreases. E) until it reaches potential GDP, and then it no longer changes.
Which of the following is NOT a necessary precondition for economic growth?
A) economic freedom B) democracy C) property rights D) free markets E) ALL of the above are necessary preconditions.
Perfect competition is characterized by a large number of buyers and sellers with identical products and no significant barriers to entry
a. True b. False Indicate whether the statement is true or false
Thomas Malthus believed that in the long run, the growth rates of real GDP would not exceed population growth
a. True b. False Indicate whether the statement is true or false