What is the difference between a production possibilities curve and a consumption possibilities curve?
What will be an ideal response?
A production possibilities curve shows the possible combinations of two products that can be produced in an economy. A consumption possibilities curve shows the possible combinations of two products that can be consumed when a nation specializes and trades with another nation.
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Price elasticity of demand is measured by the percentage change in
a. income divide by the percentage change in price b. quantity demanded divided by the percentage change in income c. price divided by the percentage change in quantity demanded d. quantity demanded divided by the percentage change in price e. total revenue divided by percentage change in price
If the government currently has a budget deficit, then
a. it does not necessarily have a debt. b. its debt is increasing. c. government expenditures are greater than taxes. d. All of the above are correct.
Firms in monopolistic competition have demand curves that are
A) horizontal.
B) vertical.
C) downward sloping.
D) upward sloping.
E) U-shaped.
Refer to the graph shown. Initial market equilibrium is at the intersection of the demand curve and S0. When government imposes a per-unit tax, supply shifts from S0 to S1. The deadweight loss associated with this tax is represented by area:
A. GHI. B. HJI. C. ABIJ. D. CDGH.