Which of the following statements best describes allocative efficiency?
a. As additional increments of resources are added to producing a good or service, the marginal benefit from those additional increments will decline.
b. when it is impossible to produce more of one good (or service) without decreasing the quantity produced of another good (or service)
c. when a country can produce a good at a lower cost in terms of other goods; or, when a country has a lower opportunity cost of production
d. when the mix of goods being produced represents the mix that society most desires
d. when the mix of goods being produced represents the mix that society most desires
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If the Federal government expands its support of education and retraining of workers who have been unemployed for a relatively long length of time, which type of unemployment would the education and retraining most likely be targeted?
A) discouraged B) cyclical C) structural D) frictional E) government
Which of the following increases the supply of gasoline?
A) a situation where the quantity of gasoline demanded exceeds the quantity supplied B) an increase in the price of gasoline C) a decrease in the price of a resource used to produce gasoline, such as crude oil D) a decrease in the demand for gas-guzzling, sport utility vehicles E) an increase in income if gas-guzzling, sport utility vehicles are a normal good
Which of the following firms has unlimited liability?
A) only proprietorships B) only partnerships C) only corporations D) both proprietorships and partnerships
The LM curve slopes upward to the right because
A) the demand for money plus the demand for nonmoney assets must equal the supply of money plus the supply of nonmoney assets. B) a higher real interest rate is associated with a higher level of the output gap in money market equilibrium. C) a higher real interest rate is associated with a higher level of saving in goods market equilibrium. D) in equilibrium the actual real interest rate must increase one-for-one with expected real interest rate.