"If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain
What will be an ideal response?
If an economy is producing at a point on its PPF, it has achieved production efficiency, but not necessarily allocative efficiency. We have achieved allocative efficiency if we are producing at the point on the PPF that we prefer to all other points because at this point we cannot produce more of any good without giving up some other good that we value more highly.
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________ analysis addresses the question of whether a policy should be used, while ________ analysis addresses the economic consequences of a particular policy.
A. Monetary; fiscal B. Fiscal; monetary C. Positive; normative D. Normative; positive
Which of the following is NOT correct about patents?
A) Patents encourage invention of new products. B) Patents stimulate innovation. C) A patent is a barrier to entry. D) Patents enable a firm to be a permanent monopoly. E) Patents are granted to the inventor of a product or service.
Ricardian view on debt is that the form of government finance is irrelevant.
A. True B. False C. Uncertain
The accelerator theory states that
A) the larger this period's desired capital stock the smaller will be this period's net investment. B) the larger the previous period's desired capital stock the larger will be this period's net investment. C) the larger the previous period's desired capital stock the smaller will be this period's net investment. D) this period's net investment is unrelated to this period's desired capital stock.