The existence of unemployment can be illustrated on a production possibilities curve by a(n)
A. point below or inside the surface of the curve.
B. inward shift of the curve.
C. movement along the curve.
D. outward shift of the curve.
A. point below or inside the surface of the curve.
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We observed that the price of a good rises and the quantity purchased also rises. Everything else being equal, it is consistent that
A. the price of a substitute good fell. B. the price of a complement rose. C. income rose. D. costs of inputs increased.
The figure above shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the marginal cost of the last gallon of milk produced is
A) $3.00 a gallon. B) $3.50 a gallon. C) $4.00 a gallon. D) $4.50 a gallon.
Other things held constant, after some point hiring additional units of labor will cause the marginal physical product of labor to decline because
A) the firm is a price taker. B) the wage rate increases when additional workers are hired. C) of the law of diminishing marginal product. D) the supply of labor is perfectly elastic.
Scarcity is illustrated graphically by a production possibilities frontier.
Indicate whether the statement is true or false.