When an economy sacrifices production of consumption goods to produce more capital goods, we would expect that the production possibilities curve will
A) shift outward.
B) shift inward.
C) become a straight line.
D) shift about in random fashion.
Answer: A
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Nominal GDP is the market value of ________.
A. all output produced and accumulated over the years B. resources (land, labor, capital, and entrepreneurship) in an economy in a given year C. all consumption and investment spending in an economy in a given year D. all final goods and services produced in an economy in a given year
The marginal rate of substitution represents the maximum amount of one commodity a consumer is willing to give up in exchange for one more unit of another commodity.
Answer the following statement true (T) or false (F)
According to the classical model, money influences
a. only prices. b. nominal and real variables in both the long and short-run. c. both nominal and real variables but only in the short-run. d. only nominal variables.
Refer to Scenario 18.1. Which of the following is TRUE?
A) The factory will never agree to B, because that would leave them with much less profit than the fishermen. B) C will never occur because that would leave the fishermen with much less profit than the factory. C) If the factory refused to install a filter, the fishermen would refuse to install a treatment plant. D) The factory must install a filter, because they contaminate the water. E) The profits above indicate profit before any agreement is made, and profit varies enough to make a mutually acceptable agreement possible.