The production possibilities frontier can be used to illustrate all of the following concepts, except one. Which is the exception?
a. productive inefficiency
b. opportunity cost
c. the law of demand
d. scarcity
e. the law of increasing opportunity costs
C
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Firms can make decisions using marginal analysis even if they do not know the shape of a demand curve.
Answer the following statement true (T) or false (F)
Which of the following algebraic forms for a demand curve yields an isoelastic demand curve?
A) Q = a - b log(P) + c log(I) B) Q = a - bP + cI C) log(Q) = a - b log(P) + c log(I) D) log(Q) = bP + cI
Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative $100 billion. To achieve full-employment output (exactly), government should:
A. increase government expenditures by $100 billion. B. increase government expenditures by $50 billion. C. reduce taxes by $50 billion. D. reduce taxes by $200 billion.
Comparing what the United States owes to other nations against what other nations owe to the United States, the United States is currently a(n):
A. Net creditor B. Net debtor C. International banking asset D. International banking liability