Which of the following would shift the production function upward?
A. an increase in the price of oil
B. an improvement in technology
C. a decrease in the supply of labor
D. a decline in the birth rate
Ans: B. an improvement in technology
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When the percentage change in the quantity demanded is less than the percentage change in price, then demand is
A) inelastic. B) unit elastic. C) elastic. D) irrelevant. E) undefined.
In a competitive market economy, a resource in short supply will be allocated
A. so that each firm gets enough to keep producing some portion of its output. B. according to how much each firm purchased before the shortage. C. to those firms that can make the most profitable use of it. D. by government fiat.
The essential functions of any central bank are:
A. preventing the formulation of monopolies or other market failure, and acting as a lender of last resort. B. managing the money supply, and acting as a lender of last resort. C. overseeing major business transactions, and managing the money supply. D. collecting taxes, and managing the supply of money.
Cost-push inflation:
A. is caused by excessive total spending. B. shifts the nation's production possibilities curve leftward. C. moves the economy inward from its production possibilities curve. D. is a mixed blessing because it has positive effects on real output and employment.