Indifference curves for perfect substitutes must be parallel lines with a slope of negative one
Indicate whether the statement is true or false
False. Indifference curves for perfect substitutes are parallel lines, but the slope is not necessarily negative one.
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The application of new technologies to the production process will increase:
A. the quantity of human capital. B. the unemployment rate. C. average labor productivity. D. the share of the population employed.
Suppose a tax cut that had been anticipated by households and businesses doesn't happen. Describe a new Keynesian analysis of the consequences of this "event."
What will be an ideal response?
The incentives for oligopolists to cheat on collusive agreements are strongest during periods of increasing industry sales
a. True b. False
Why is the fear of expropriation an obstacle to economic growth?
a. Without research and development, no technological advances can be made. b. Large government spending causes negative externalities. c. Powerful special interest groups have too much control. d. No foreign investment comes to the country, because of the lack of guarantees. e. The fear of expropriation causes too many resources to be devoted to military spending which is a highly unproductive sector.