Which of the following is assumed when constructing a production possibilities curve?
A) a fixed amount of resources
B) the efficient use of resources
C) resources of a given quality
D) All of the above are correct.
Answer: D
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If the real interest rate increases, there is
A) an upward shift of the consumption function. B) a movement downward along consumption function. C) a change in the slope of the consumption function. D) a movement upward along the consumption function. E) a downward shift of the consumption function.
If devaluation does not improve the BOT, but only the BOP, this implies that
A) the capital account is in deficit. B) the current account is in surplus. C) the improvement comes in the capital account. D) Both B and C.
Refer to Scenario 7.2. This production function is an example of which of the following types of production functions?
A) Cobb-Douglas B) Leontief C) Fixed proportions D) Lagrange E) none of the above
It takes Ross 6 hours to produce a bushel of corn and 2 hours to wash and polish a car. It takes Courtney 6 hours to produce a bushel of corn and 1 hour to wash and polish a car. Courtney and Ross cannot gain from specialization and trade, since it takes each of them 6 hours to produce 1 bushel of corn
a. True b. False Indicate whether the statement is true or false