The law of increasing opportunity costs is a result of the fact that:
A) the value of the dollar has declined over time.
B) wage rates rise as the economy reaches full employment.
C) consumers tend to value a good more when they don't have much of it.
D) resources are not equally productive in all output categories.
Ans: D) resources are not equally productive in all output categories.
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If supply increases, the equilibrium price will rise and the equilibrium quantity will fall.
Answer the following statement true (T) or false (F)
To make a rational choice, a person
A) adds the total costs to determine if the total is small enough. B) adds the total benefits and the total costs and then compares the two totals. C) takes account of all benefits and all opportunity costs, including both marginal costs and sunk costs. D) adds the total benefits to determine if the total is large enough. E) compares the extra benefits of one more unit to the extra costs of one more unit.
According to the J curve, the rapid depreciation in the dollar from 1985 to 1987 caused net exports to
A) rise in the short run and fall in the long run. B) rise in the short run and rise further in the long run. C) fall in the short run and rise in the long run. D) fall in the short run and fall further in the long run.
Refer to the above figure. A movement from point A to point B for a good is most likely a result of
A) an increase in the price of that good. B) a decrease in the price of that good. C) an expectation of an increase in the relative price of that good. D) an expectation of a decrease in the relative price of that good.