Refer to Figure 10-5. Which of the following statements is true?
A) Bundles r and w are not affordable.
B) The consumer gets more utility from bundle r than from bundle v.
C) The consumer gets less utility from bundle w than from bundle v.
D) Bundles r, s, t, and u all cost the same.
A
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In the 1980s, the federal government undertook a major build-up of the military sector, leading to reports that prices charged by military contractors were spiraling upward. According to production possibilities analysis, this result is not surprising due to:
A) the law of increasing opportunity cost. B) economic efficiency. C) technical efficiency. D) resource underutilization.
Flour is an input used to produce cookies. Suppose that the price of flour rises. As a result
A) the supply curve for flour will shift to the right. B) the supply curve for flour will shift to the left. C) the supply curve for cookies will shift to the right. D) the supply curve for cookies will shift to the left.
Auto workers laid off from Hot-Rod Autoworks as the result of a recession are considered
A) seasonally unemployed. B) frictionally unemployed. C) structurally unemployed. D) cyclically unemployed.
According to this Application, economist John Taylor believes that if the Fed had not followed "easy money" policy during the early 2000s,
A) housing starts would have declined quicker, accelerating the timing and severity of the housing bust. B) housing starts would have been much higher and the housing boom would have continued. C) housing starts would have been much lower and the housing boom and bust would have been avoided. D) housing starts would have stabilized, leading to a mild housing boom with no bust.