Figure 2-7
Which of the following could explain the shift in the production possibilities frontier shown in from AC to AB?
a.
technical improvements in both petroleum and clothing production
b.
a productive improvement in clothing production that has no effect on petroleum production
c.
a decrease in the size of the labor force that can produce either petroleum products or clothing
d.
major oil reserves in Alaska are declared off-limits to producers in order to protect the environment
e.
major oil reserves are discovered off the coast of Africa
e
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Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?
A) a drought that sharply reduces cotton output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of cotton
Everything else held constant, a monetary contraction is characterized by ________ output and ________ interest rates
A) rising; rising B) rising; falling C) falling; rising D) falling; falling
What's the difference between firm-specific risk and market risk? Will diversification eliminate one or both? Explain
An economy operating inefficiently is graphed as a point ______ the production possibilities curve.
a. above
b. inside
c. outside
d. on