Suppose that opportunity costs are constant and that Gorge can either bake a maximum of six pies or three cakes in a day. Brandi can either produce a maximum of eight pies or two cakes in a day. Brandi's opportunity cost to produce one cake is
A. six pies.
B. two pies.
C. four pies.
D. one-half pie.
Answer: C
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If the U.S. government enters the foreign exchange market and sells dollars to maintain a specific exchange rate with the yen, the dollar will ________ and the yen will ________
A) depreciate; depreciate B) depreciate; appreciate C) appreciate; depreciate D) appreciate; appreciate
What is the difference between an inflation-indexed Treasury bond, and a Treasury bond that is not indexed?
A. An inflation-indexed Treasury bond guarantees a certain real rate of return, while a nonindexed Treasury bond does not. B. A nonindexed Treasury bond guarantees a certain real rate of return, while a nonindexed Treasury bond does not. C. An inflation-indexed Treasury bond can only be purchased directly from the Federal Reserve, while a nonindexed Treasury can be purchased through a broker. D. An inflation-indexed Treasury bond always guarantees the purchaser a 5 percent rate of return, while a nonindexed Treasury bond does not.
At the market equilibrium
a. quantity exceeds price b. excess demand equals excess supply (and both are zero) c. price and quantity are equal d. each seller produces at full capacity e. everyone who is represented along the demand curve buys the good
Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines.
A. law of trade-offs B. law of diminishing marginal utility C. production possibilities frontier D. law of increasing marginal utility