What is a utility possibility frontier?
The utility possibility frontier shows the possible combinations of utility that an efficient bargain can get the two parties. It shows the potential benefits to the bargainers and how to identify strategies that make them both better off. However, it does not suggest any theory that might help predict where two bargainers will end up.
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According to the graph shown, if the government decides to increase its spending, it is most likely at point:
A. C
B. B
C. D
D. It's impossible to tell without more information.
If the national debt is owned by domestic citizens:
a. the debt will not have to be repaid. b. future interest payments transfer funds from one group of Americans to another. c. the debt will have to be repaid first to domestic creditors, then to foreign creditors. d. future interest payments will go to pay foreign debt first, then debt owed to American citizens.
Price floors cause ______.
a. surpluses b. shortages c. scarcity d. equilibrium
The new growth theory asserts that profits are
A) temporary, because the discoveries that lead to profits are eventually used by all. B) an illusion, since costs are never fully covered. C) permanent, because physical activities can be replicated. D) not an essential component determining whether the economy grows or not. E) permanent, because they are derived from discoveries.