A point or combination that is on the production possibilities frontier is
A. unattainable and efficient.
B. attainable, but not efficient.
C. unattainable, but not efficient.
D. attainable and efficient.
Answer: D
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When the government grants an inventor a patent
A) he has the exclusive right to make, sell or use his invention for 5 years. B) the protection of a current invention would increase spending on R&D. C) the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others. D) the patent holder is guaranteed a profit on his invention.
Which of the following is necessary for a monopolist to price discriminate between groups?
A) The groups are identifiable. B) The groups have different willingness to pay. C) A customer from one group cannot resell to a customer in another group. D) All of the above conditions are necessary for the monopolist to price discriminate.
An indifference curve cannot be positively sloped because
A. a point to the right of another point will represent a lower quantity of both goods and a reduction in utility. B. the law of diminishing marginal utility would be violated. C. a point to the right of another point will represent a higher quantity of both goods and an increase in utility. D. the substitution effect would be violated.
If a bank receives a $1 million discount loan from the Federal Reserve, then the bank's reserves will
A) not change. B) increase by $1 million. C) increase by less than $1 million. D) increase by more than $1 million.