A society can produce two goods: green tea and vitamin water. As this society moves down its production possibility frontier, producing more and more units of vitamin water, the opportunity cost of producing vitamin water increases. The society's production possibilities frontier will be
A. positively sloped and bowed outward.
B. negatively sloped and bowed inward.
C. positively sloped and bowed inward.
D. negatively sloped and bowed outward.
Answer: D
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All of the following are part of fiscal policy EXCEPT
A) setting tax rates. B) setting government spending. C) choosing the size of the government deficit. D) controlling the money supply
Under a system of flexible exchange rates, an increase in the foreign demand for the U.S. dollar in the foreign exchange market will cause the: a. dollar to appreciate
b. dollar to depreciate. c. U.S. trade deficit to decrease. d. U.S. inflation rate to increase.
Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of oil workers will ________ and employment of oil workers will ________.
A. decrease; not change B. decrease; increase C. increase; increase D. increase; decrease
When a state government chooses to build more roads, the resources used are no longer available for public education programs. This dilemma illustrates the concept of:
A. Production expenses B. Unemployment issues C. Unintended consequences D. Opportunity cost