The production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency
a. True
b. False
A
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Which of the following is a criterion by which Gordon judges the desirability of any given level of actual real GDP?
A) Actual real GDP is too low if it causes the unemployment rate to be higher than necessary. B) Actual real GDP is too high if it strains a nation's ability to produce and puts upward pressure on the inflation rate. C) Actual real GDP is at a desirable level if there is no tendency for inflation to accelerate or decelerate. D) All of the above.
Suppose demand increases and supply decreases. Which of the following will happen?
a. Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease. b. Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase. c. Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. d. Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease. e. The change in equilibrium price and quantity cannot be determined.
Of the collection of supply and demand diagrams in Figure 2.2, which one(s) could show the result of an increase in income?
A. Figure 1 B. Figure 2 C. Figure 3 D. Figures 1 and 2
If the percentage change in the quantity demanded of a good is greater than the percentage change in price, price elasticity of demand is:
A. elastic. B. inelastic. C. perfectly inelastic. D. perfectly elastic.