Which of the following is an assumption used in deriving a production possibilities curve?
A. The wages in an industry increase constantly.
B. Poverty always exists in society.
C. The amount of resources is fixed.
D. Prices will continue to increase.
Answer: C
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A perfectly competitive firm with a random demand has a ________ demand curve and ________ marginal revenue curve.
A) horizontal; horizontal B) vertical; horizontal C) vertical; vertical D) horizontal; vertical
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
a. $0.13. b. $1.25. c. $8. d. $200. e. $8,000.
An economy’s rate of _______________ growth is closely linked to the growth rate of its GDP per capita.
a. domestic b. business c. technology d. productivity
When employment discrimination results from the personal prejudices of employers, economic theory suggests that
a. it is costless for employers to discriminate against groups they do not like. b. discrimination by an employer will reduce production costs since the employer can pay lower wages. c. the wages of employees who are discriminated against will actually rise. d. an employer who discriminates will experience higher costs.