The above figure shows a production possibility frontier for a society with two members, Al and Bruce. If point "a" is the efficient product mix, draw a possible Edgeworth box and indifference curves
What will be an ideal response?
The Edgeworth box has 0,0 as the southwest corner and point "a" as the northwest corner. The indifference curves must be tangent where their slopes equal the slope of the PPF at point "a."
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Which of the following was NOT considered to have been a drawback of the pre-1914 gold standard?
A) It sometimes led to inflation, which several times in the late nineteenth century caused recessions in the United States. B) Countries had little control over their domestic monetary policies. C) Countries with trade deficits experienced deflation. D) Changes in the world money supply were strongly influenced by gold discoveries.
In Figure 4.2, the reason that the increase in output from point A to B is much less than the increase in output from point B to C is that 
A. it is very difficult and very expensive to increase output once the capacity of the machinery has been reached. B. it always costs more money to increase output. C. small levels of production are often inefficient and that significant increases in production can occur thereafter at only a small additional cost. D. there is waste.
A characteristic of monopolistic competition is
A) product differentiation. B) a high capital-output ratio. C) a low ratio of fixed costs to variable costs. D) the absence of advertising.
In the long run, the price level is determined by aggregate supply
a. True b. False Indicate whether the statement is true or false