A bowed production possibilities curve is consistent with
A. highly specialized resources.
B. a decreasing opportunity cost.
C. the overutilization of productive resources.
D. a technologically inefficient society.
Answer: A
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Refer to Table 2-1. Which of the following would be a mutually agreeable rate of exchange?
A) 1F = 1C B) 1F = 2C C) 1F = 3C D) No exchange rate would be mutually agreeable.
The above figure illustrates the marginal social benefit and marginal social cost for chicken sandwiches. If the quantity is decreased from 6 to 3 and the price increases from $3 to $4, consumer surplus will decrease by
A) $1.50. B) $2.00. C) $3.00. D) $4.50.
Monopolistic competition is characterized by excess capacity because:
A. firms charge a price that is less than marginal cost. B. firms produce at an output level less than the least-cost output. C. the demand for a product is perfectly elastic in this type of industry. D. firms are always profitable in the long run.
In presidential elections, voters often find that they do not agree with any single candidate on all the issues that matter to them (the voters). This is known as the:
A. Principal-agent problem B. Limited and bundled choice problem C. Rent-seeking behavior problem D. Lack of accountability problem