The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that:
A. the principle of increasing opportunity costs is relevant.
B. society's resources are limited.
C. the opportunity cost of producing each product is constant.
D. resources are perfectly shiftable between alternative uses.
Answer: A
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
When applied to committees, the median voter model concludes that _____
a. becomes irrelevant as committees will be unable to select a clear outcome b. the committee selects the outcome preferred by the median voter c. when preferences are double peaked, the committee meets the demand of the median voter d. a cyclical majority will emerge, if voters are irrational
Refer to the above figure. What is the socially optimal point of production?
A) P1 and Q1. B) P4 and Q1. C) P1 and Q4. D) P3 and Q2.
The following list contains factors that are related to the aggregate demand curve.1)Household expectations 2)Profit expectations 3)Degree of excess capacity 4)Personal income tax rates 5)Exchange rates 6)National income abroad 7)Government spending 8)Household wealth Changes in which three of the above factors would most likely cause a change in consumer spending?
A. 1, 2, and 6 B. 3, 5, and 7 C. 1, 4, and 8 D. 5, 6, and 7