An inward shift of the production possibilities curve
A. represents an economic decline.
B. means that the previous levels of production are now unobtainable except under unusual circumstances such as war.
C. means that the economy can produce more of both goods.
D. represents an economic decline AND means that the previous levels of production are now unobtainable except under unusual circumstances such as war.
D. represents an economic decline AND means that the previous levels of production are now unobtainable except under unusual circumstances such as war.
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Answer the following statement(s) true (T) or false (F)
1. Each user of a common property imposes a negative externality on its other users. 2. The producer of a public good creates a positive externality, so that such goods tend to be overproduced. 3. The tragedy of the commons is a situation where too much of an input is used by individuals, collectively making each individual worse off. 4. When people have identical tastes, an increase in the demand for a common property's use will increase the social gain it creates. 5. People use a common property up to the point where the marginal cost of using it equals the social marginal benefit received from it.
Which of the following indicates an input is being overused relative to the optimal level?
a. MRP = P of input. b. MRP > P of input. c. MRP < P of input. d. MPP > P of output.
When an economy's resources are not fully employed, then it must be true that the:
A. production point is located outside and to the right of the production possibilities curve. B. production point is located along the production possibilities curve. C. production point is located inside and to the left of the production possibilities curve. D. production possibilities curve shifts to the left.
If the MPS = 0.2, the multiplier would be:
A. 0.5. B. 1. C. 2. D. 5.