On a production possibility frontier, the idea producing and consuming more of one good or group of goods means producing and consuming less of some other good or group of goods is expressed by
A) the rate at which the frontier slopes downward
B) the rate at which the frontier slopes upward
C) the items on the X and Y axes
D) the frontier itself
Answer: A) the rate at which the frontier slopes downward
You might also like to view...
Which of the following is likely to happen if the annualized growth rate of money supply increases while real GDP remains unchanged?
A) The unemployment rate will rise. B) The nominal GDP will fall. C) The inflation rate will fall. D) The inflation rate will rise.
In the figure above, if the firm is regulated using an average cost pricing rule, the deadweight loss created is equal to the area of
A) ABG. B) BEFG. C) BCFG. D) BCE. E) None of the above because there is no deadweight loss created.
Substitution bias
a. is one factor that causes the Consumer Price Index to underestimate the inflation rate b. is caused by the poor quality of many products c. is one of the primary causes of inflation d. involves consumer behavior that helps explain why the Consumer Price Index overestimates the inflation rate e. suggests most economists substitute other price indices for the flawed Consumer Price Index
Often when consumers enter the used car market to make a purchase,
a. they know little about what they are purchasing. b. the motto "let the buyer beware" applies. c. the information they gain may not be perfect, but may be what economists call "optimally imperfect." d. All of the above are correct.