Answer the following questions true (T) or false (F)
1. If a country is producing efficiently and is on the production possibilities frontier, the only way to produce more of one good is to produce less of the other.
2. Consider a country that produces only two goods: kayaks and coconuts. Suppose it is possible for this country to increase its production of kayaks without producing fewer coconuts. In this case, its current output combination is efficient.
3. Any output combination outside a production possibilities frontier is associated with unused or
underutilized resources.
1. TRUE
2. FALSE
3. FALSE
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The wage rate for widget makers is currently $25 per hour and Ajax hires 20 widget makers. If the wage rate were decreased to $20, what would happen to the marginal revenue product for labor at Ajax?
A) It would remain the same. B) It would increase since Ajax's demand for labor curve will shift. C) It would increase since the price of widgets would decrease. D) It would decrease since Ajax will hire more workers.
If the tax multiplier is -4.0, what is the marginal propensity to consume?
a. 0.66 b. 0.75 c. 0.50 d. 0.80 e. 0.25
Assuming the interest rate is 5 percent, which of the following has the greatest present value?
a. $240 paid in three years b. $225 paid in two years c. $210 paid in one year d. $200 today
"Offshoring" refers to:
A. importing goods, services, and resources. B. stashing money in offshore accounts for the purpose of avoiding taxes. C. shifting work overseas that was previously done domestically. D. exporting key resources.