The graph below indicates that the economy can produce both:
A. 10 units of eggs and 20 units of rye, and this would be efficient.
B. 20 units of eggs and 5 units of rye, although this would not be efficient.
C. 10 units of eggs and 20 units of rye, although this would not be efficient.
D. 20 units of eggs and 5 units of rye, and this would be efficient.
Answer: C
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If a natural monopoly decreases the quantity of output it produces, then:
A. its profit will increase. B. its average cost will decrease. C. it will have to decrease its price. D. its average cost will increase.
Suppose the Fed increases the money supply. Which of the following is true?
A) At the original interest rate, the quantity of money demanded is less than the quantity of money supplied. B) At the original interest rate, the quantity of money demanded is equal to the quantity of money supplied. C) The interest rate must rise for the money market to clear. D) At the original interest rate, the quantity of money demanded is greater than the quantity of money supplied.
The maximum quantity of good X that is affordable is:
A. M/PX. B. M/X. C. PYY. D. M/PY.
In a closed economy, which of the following components of GDP is not included?
A) investment B) government spending C) net exports D) consumption