Currently an economy is producing at a point on its production possibilities frontier for goods X and Y. It is producing 100 units of good X and the opportunity cost of producing 1X is 3Y. If good X is produced at increasing opportunity costs, then when the economy produces 120 units of good X (on the same PPF) the opportunity cost of producing 1X could be ______Y.
What will be an ideal response?
Answer: 4
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An increase in bond prices will most likely result in
A) a decrease in the quantity demanded of money. B) an increase in the quantity demanded of money. C) an increase in the opportunity cost of holding money. D) an increase in interest rates.
Suppose Belgium produces only two goods, chocolate and lace. If Belgium has a comparative advantage in lace, a move toward free trade will
A) benefit chocolate workers, harm lace workers in the short run, but benefit the nation as a whole. B) harm chocolate workers in the short run, benefit lace workers, but benefit the nation as a whole. C) benefit chocolate workers, harm lace workers in the short run, but harm the nation as a whole. D) harm chocolate workers in the short run, harm lace workers, but benefit the nation as a whole.
When the errors are heteroskedastic, then
A) WLS is efficient in large samples, if the functional form of the heteroskedasticity is known. B) OLS is biased. C) OLS is still efficient as long as there is no serial correlation in the error terms. D) weighted least squares is efficient.
For any competitive labor market, what change would have to occur to cause the labor supply to decrease and shift the supply curve left?
A. Number of firms increases B. None of these statements is true. C. Number of workers increases D. Opportunity cost of work increases