A point outside a production possibilities curve indicates
A. an output combination that is unobtainable with the current resource and technology levels.
B. that resources are not being used efficiently.
C. that resources are being used very efficiently.
D. opportunity costs are constant.
Answer: A
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If an individual's utility function is quasi-concave, his or her MRS will:
a. diminish as x is substituted for y. b. increase as x is substituted for y. c. be undefined except in special cases. d. always depend only on the ratio of x to y.
We have read in this chapter that people with insurance may be more likely to engage in risky behavior because they are insured. Does it make sense then that there should be an "insurance tax" on people that engage in these types of activities?
What will be an ideal response?
A natural monopoly has economies of scale for most if not all of its range of output
a. True b. False Indicate whether the statement is true or false
Which of the following trends is most likely the result of an expansionary monetary policy?
a. The demand for both costume jewelry and expensive jewelry rises. b. The demand for both economy cars and luxury cars drops. c. The demand for fast food drops, but the demand for gourmet food rises. d. The demand for cheap concert seats rises, but the demand for expensive seats drops.