If the production possibilities frontier for two goods is shown as a straight line, this implies that
A. there is no trade-off between the two goods.
B. the principle of increasing costs is present.
C. the slope of the production possibilities frontier is increasing.
D. there are no specialized resources used in the production of these goods.
Answer: D
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A conclusion of the theory of rational expectations is that, in the short run, the impact of a correctly anticipated fiscal policy designed to decrease AD will:
a. result in no net change in AD once people's expectations adjustments have been accounted for b. shift AD in the opposite direction intended once people's expectations adjustments have been accounted for. c. decrease the price level. d. result in no change in the price level.
Demand for a good is said to be inelastic if the quantity demanded increases slightly when the price falls by a large amount
a. True b. False Indicate whether the statement is true or false
Market power and externalities are examples of
a. laissez-faire economics. b. public policy. c. market failure. d. welfare economics.
In order to sell more of its product, a monopolist must
a. sell to the government. b. sell in international markets. c. lower its price. d. use its market power to force up the price of complementary products.