The production possibilities frontier is a boundary that separates
A) fair combinations of goods and services that can be consumed from unfair ones.
B) the combinations of goods that can be produced from the combinations of services.
C) attainable combinations of goods and services that can be produced from unattainable ones.
D) affordable production points from unaffordable points.
E) equitable combinations of goods and services that can be produced from inequitable ones.
C
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Assume that Honduras has a comparative advantage in producing bananas and exports bananas to Brazil. We can conclude that
A) Honduras has a lower opportunity cost of producing bananas relative to Brazil. B) Brazil has an absolute disadvantage in producing bananas relative to Honduras. C) Labor costs are higher for banana producers in Brazil than in Honduras. D) Honduras also has an absolute advantage in producing bananas relative to Brazil.
Which of these does not hold true if an economy is simultaneously in long-run and short-run equilibrium? a. The actual price level equals the expected price level
b. Aggregate quantity supplied equals potential output. c. Aggregate quantity demanded equals potential output. d. Aggregate quantity supplied equals aggregate quantity demanded. e. Aggregate demand curve is horizontal at the potential output level.
When firms become so large that they have to add additional layers of management and decision making becomes more cumbersome,
a. economies of scale are said to occur b. marginal cost begins to fall in the short run c. marginal cost begins to rise in the short run d. the long-run average total cost curve is flat e. the long-run average total cost curve slopes upward
The most common estimate of the value of transactions used to estimate velocity is
a. real GDP. b. total sales. c. nominal GDP. d. cash balances.