The production possibilities frontier separates ________
A) the goods and services that people want from those that they do not want
B) the types of goods that can be attained from those that can't be attained
C) the quantities of goods and services that can be produced from those that cannot be produced
D) the combinations of goods that people value and those that they don't
C
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Refer to the above figure. An increase in aggregate demand between real Gross Domestic Product (GDP) levels Y0 and Y1
A) would not increase output since the economy is already working at full capacity. B) would have no effect on the price level. C) would cause price levels to fall. D) would most likely result in some inflation.
When poverty is defined by an relative real income level, what will happen to the poverty rate if the distribution of income is not perfectly equal?
A) The poverty rate will increase forever. B) The poverty rate will eventually be zero. C) The poverty rate will always remain constant. D) The poverty rate will change, but always exist.
A perfectly competitive firm: a. cannot choose its own price. b. can increase the price of a good in order to increase its revenue
c. can decrease the price of a good in order to increase its share in the market. d. cannot choose to produce the quantity it wants.
In the long run, firms in a perfectly competitive market:
A. produce a quantity that maximizes profits. B. choose the level of output that minimizes average total costs. C. earn zero economic profit. D. All of these are true.