Referring to Figure 1.8, if a point is attainable, it is in 
A. AREA #1 or is on the curve.
B. AREA #2 but not on the curve.
C. AREA #2 or is on the curve.
D. AREA #1 but not on the curve.
Answer: A
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Any change that reduces desired saving relative to desired investment (for a given level of output) causes the real interest rate to ________ and shifts the IS curve ________
A) increase; down and to the left B) increase; up and to the right C) decrease; down and to the left D) decrease; up and to the right
Which of the following is true?
a. Tangible goods are subject to economic analysis but intangible goods are not b. Intangible goods are just an alternative term for services. c. Goods and services can be made costless by having the government give them away to citizens. d. All goods and services, whether tangible or intangible, are made from scarce resources and are subject to economic analysis.
If there are no fixed costs in the long run, how can it be said that economies of scale arise from spreading fixed costs over more units of output?
A. Costs of quasi-fixed inputs get spread over more units of output which drives down average cost in the long run. B. Long-run average cost falls because all fixed costs are sunk. C. Average fixed costs decline continuously as output rises. D. Economies of scale is a short run phenomenon, and so diminishing returns is the root cause of scale economies.
"Private costs are borne by individuals while social costs are borne by society." Do you agree or disagree? Why?
What will be an ideal response?