If a country is producing at point where an increase in the production of one good requires a reduction in the production of another good, then it must be producing at an:
A. undesirable point.
B. inefficient point.
C. efficient point.
D. unattainable point.
Answer: C
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The drawback to calculating real GDP using base-year prices is that
A) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. B) quality changes are reflected in base-year prices. C) relative prices change over time and these changes are reflected in base-year prices. D) real GDP in one year is not comparable to real GDP in another year.
Even though firms in competitive price-searcher markets do not produce at minimum ATC, competitive price-searcher markets may still be consistent with economic efficiency because
a. strict government regulations force the firms in these markets to keep their costs low. b. they provide consumers with a greater diversity of products. c. they encourage more advertising in both price-searcher and price-taker markets. d. special legal protections for price searchers make it possible for them to more efficiently use resources.
Product differentiation always leads to some measure of market power
a. True b. False Indicate whether the statement is true or false
If consumption spending is larger than disposable income,
A. saving is positive. B. dissaving occurs. C. saving is exactly zero. D. a depression results.