If potential output exceeds actual output, the economy:
A. is in neither a short-run nor long-run equilibrium.
B. is experiencing a recessionary gap.
C. is experiencing an inflationary gap.
D. may be in a long-run equilibrium but is not in a short-run equilibrium.
Answer: B
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The idea of increasing opportunity cost is reflected in the
A) bowed in shape of the production possibilities frontier. B) bowed out shape of the production possibilities frontier. C) linear shape of the production possibilities frontier. D) fact that the PPF shows there are unattainable production points. E) positive slope of the production possibilities frontier.
The most recent agreement in which participating nations agreed to reduce their overall emissions of greenhouse gases was
A. the 2001 Doha Round of climate change. B. the 2015 Paris Agreement on Climate Change C. the 1987-1993 Uruguay Round of climate change D. the 1997 Kyoto Protocol on climate change.
If the opportunity costs of producing a good increase as more of that good is produced, the economy's production possibility frontier will be
A. a negatively sloped straight line. B. negatively sloped and "bowed inward" toward the origin. C. negatively sloped and "bowed outward" from the origin. D. a positively sloped straight line.
Each point on a demand curve shows
A) the willingness of consumers to purchase a product at different prices. B) the consumer surplus received from purchasing a given quantity of a product. C) the economic surplus received from purchasing a given quantity of a product. D) the legally determined maximum price that sellers may charge for a given quantity of a product.