Answer the following questions true (T) or false (F)
1. The production possibilities frontier represents the technically efficient combination of two products a business can produce in the current period given its existing resources and technology.
2. The price of the product and marginal revenue are identical under conditions of perfect competition.
3. The marginal rate of product transformation represents the slope of the production possibilities frontier.
1. TRUE
2. TRUE
3. TRUE
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If an individual moves money from a savings deposit account to a money market deposit account
A) M1 decreases and M2 stays the same. B) M1 stays the same and M2 increases. C) M1 stays the same and M2 stays the same. D) M1 increases and M2 decreases.
Which of the following would cause movement downward along the demand curve for a normal good, leading to an increase in quantity demanded?
a. A decrease in the price of a substitute good b. An increase in the price of a complementary good c. A decline in the price of the good d. Consumer expectations that the good will become more expensive in the near future
Things that cause supply curve to shift?
What will be an ideal response?
If aggregate demand increases and as a result equilibrium real GDP and employment increase but the price level remains unchanged, we can assume that the aggregate demand curve
A. is vertical. B. is horizontal. C. intersects a vertical segment of the aggregate supply curve. D. intersects a horizontal segment of the aggregate supply curve.