If all resources were perfectly adaptable for alternative uses, the production possibilities curve would
A. be a straight line.
B. be bowed out.
C. be a loop.
D. not exist.
Answer: A
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Generally, the supply of a resource in the short run will be
a. more elastic than in the long run. b. less elastic than in the long run. c. equally elastic as the supply of the resource in the long run. d. directly related to the elasticity of demand for the product that the resource helps produce.
Which of the following is an example of the precautionary motive for saving?
A. Jordan sets aside $200 per month in case she has to pay for a new roof for her house. B. Every month, Chris puts $400 into his saving account so that he can buy a new car in a few years. C. Pat puts $400 per month in his 401(k) retirement account. D. Gerry and Terry put $2,000,000 in a trust fund that will go to their children when the parents die.
In a flexible exchange rate regime, a reduction in the expected future exchange rate will cause
A) the IP curve to shift to the left/up. B) the IP curve to shift to the right/down. C) a movement along the IP curve. D) neither a shift nor movement along the IP curve.
The exit of farms from a market should
A. Increase the equilibrium market output. B. Decrease the equilibrium market price. C. Increase the equilibrium market price. D. Shift the agricultural market supply curve to the right.