A point that lies above the production possibilities frontier (PPF) represents a combination of at least two goods that is
a. unavailable.
b. available.
c. representative of efficient production.
d. representative of inefficient production.
e. none of the above
Answer: a. unavailable.
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Which of the following results in a movement along the supply curve of spinach but does not shift the supply curve of spinach?
A) disastrous weather that destroys half of this year's spinach crop B) a rise in the price of spinach C) an increase in wages for workers in spinach fields D) great weather that produces a bumper spinach crop this year
The above figure shows Jane's budget line and two of her indifference curves. If the price of a lobster dinner falls so that Jane can now purchase the combination represented by Point B, Jane would experience
A) an increase in the opportunity cost of a lobster dinner. B) no change in her marginal rate of substitution. C) an income and a substitution effect. D) Both answers B and C are correct.
Which of the following appears to be evidence against the public interest view of the Fed's motivation?
A) The conflict with the Treasury over interest rate fixing during World War II. B) The failure of the Fed to emphasize the goal of price stability. C) The unwillingness of the Fed to turn over its excess profits to the Treasury. D) The independence of Fed chairmen from the authority of the President.
The circular flow model shows the relationships between
A. government and business firms. B. government and households.