If an economy uses its resources inefficiently, this situation would be illustrated on a production possibilities diagram as
a. an inward shift of the production possibilities curve.
b. an outward shift of the production possibilities curve.
c. operating at a point outside the production possibilities curve.
d. operating at a point inside the production possibilities curve.
D
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Barriers to entry can be the result of
a. Positive network externalities b. High switching costs c. Economies of scale d. All of the above
Price elasticity of supply is always
A) positive because of the law of supply. B) negative because of the law of supply. C) positive because of diminishing marginal utility. D) negative because percentages can only be negative.
Bankruptcy laws provide proper incentives by
A. completely absolving the person in debt from responsibility for it. B. making it a moral failing C. giving the person in debt a reason to work hard because they don't have to pay it all off. D. giving the person in debt a reason to work hard to pay it all off.
An increase in the aggregate expenditures schedule ________.
A. decreases aggregate demand by the amount of the increase in aggregate expenditures B. increases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier C. decreases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier D. increases aggregate demand by the amount of the increase in aggregate expenditures only