Any point inside the production possibilities curve indicates:
A. the presence of technological change.
B. that resources are imperfectly substitutable among alternative uses.
C. the presence of inflationary pressures.
D. that more output could be produced with the available resources.
Answer: D
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Suppose the market clearing price for apples rises from $2.00 to $3.00 per pound, and the overall market clearing output decreases from 1 million to 1/2 million pounds. How can we explain the increase in price and decrease in market output?
A) Supply decreased and demand remained unchanged. B) Supply increased and demand remained unchanged. C) Demand increased and supply remained unchanged. D) Demand decreased and supply remained unchanged.
A sewer system is
a. rival and exclusive, and therefore is a public good b. nonrival and nonexclusive, and therefore is a public good c. exclusive, but since it is nonrival, it is a public good d. nonrival, but since it is exclusive, it is a private good e. nonrival and nonexclusive, and therefore is a private good
The largest single portion of state and local budgets is devoted to
a. State and local defense. b. Health and public welfare programs. c. State and local unemployment compensation. d. Education. e. Interest payments on state and local debt.
In the short run, in which of the following ways is an expansionary monetary policy most likely to cause the real interest rate and the value of the domestic currency to change?
a. increase; increase b. increase; decrease c. no change; decrease d. decrease; increase e. decrease; decrease