When an economy produces at its allocatively efficient production point
A) scarcity is not a problem.
B) resources are not limited.
C) a society can increase the production of all goods.
D) a society can increase the production of one good only by decreasing the production of some other good that is valued more highly.
D
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The income elasticity of demand is
A) positive for a normal good. B) zero for an inferior good. C) less than one for an income elastic normal good. D) Only answers A and B are correct. E) Answers A, B, and C are correct.
When consumer surplus is negative, a consumer is willing to pay more than the market price of the good
a. True b. False Indicate whether the statement is true or false
The mathematics of amortization for mortgage loans must utilize the
A. payment frequency. B. payment frequency and the period of time over which the debt will be repaid. C. period of time over which the debt will be repaid. D. structure of marginal tax rates.
The Fed can reduce the money supply by reducing
A) the currency—deposit ratio. B) the monetary base. C) reserve requirements. D) the discount rate.