An economy operating on its production possibilities frontier is:
a. wasting resources.
b. efficient.
c. inefficient.
Answer: b. efficient.
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When Starbucks accepts your $10 bill for two Grande Lattes and one Tall Caramel Macchiato, the $10 bill serves as a
A) medium of exchange. B) store of value. C) standard of value. D) commodity money.
Assume that you are the new CEO of a major corporation that has five major product lines each run as separate corporations
You discover that if you invested the company's money outside of the firm that it could earn a 15% rate of return on the investment. You tell all the presidents of each of these subsidiary companies that in order for them to remain with the company that their return on capital must equal to or exceed 15% rate of return. Use two economic principles discussed in chapter 1 to explain why the CEO's advice is sound.
The LM curve will shift to the right when government expenditures increase
Indicate whether the statement is true or false
The opportunity costs of the firm using its own funds are measured by the:
A) market interest rate. B) inflation rate. C) price level. D) menu costs.