If society leaves some of its resources unemployed, then it will be operating at a point:
a. beneath its production possibilities curve.
b. at a corner of its production possibilities curve.
c. anywhere along its production possibilities curve.
d. outside of its production possibilities curve.
a
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In the above figure, the budget line would rotate in the direction indicated as a result of a
A) rise in the price of a book. B) fall in the price of a book. C) rise in the price of a movie. D) decrease in income.
Contractionary monetary policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above.
In general, people are willing to pay more than the expected value of insurance because:
A. they are risk-averse. B. most people would have trouble finding enough money to cover their losses. C. it allows them to afford major expenses from catastrophes without going bankrupt. D. All of these statements are true.
A tax levied on imported goods is called
a. an excise tax. b. a quota. c. a foreign profits tax. d. a tariff.