An economy produces at point a on the PPF shown in the above figure. A drought reduces the amount of wheat produced and the economy produces at point b. The opportunity cost of a unit of wheat ________
A) remains the same
B) increases
C) is impossible to calculate without numbers on the axes
D) decreases
B
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Imagine that the U.S. economy is in equilibrium at full employment without inflation where national income is at $6,700 billion. The MPC = 0.8 . If massive flooding along the Mississippi River leads Congress to approve a spending package of $10 billion to aid flood victims, the government must also take which of the following actions to keep the economy in equilibrium at full employment without
inflation? a. increase taxes by $10 billion b. decrease taxes by $10 billion c. increase taxes by more than $10 billion d. decrease taxes by more than $10 billion e. increase taxes by less than $10 billion
Supply-side inflation will increase the price level and reduce real GDP
a. True b. False Indicate whether the statement is true or false
Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?
A. $250. B. $1,250. C. $1,500. D. $15,000.
To be an example of a public good, a good must be both rival in consumption and nonexcludable.
Answer the following statement true (T) or false (F)