Figure 34-7
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In Figure 34-7, where AB represents the production possibilities of Pestoland and CD the production possibilities of Pastaland, Pastaland is
A. better at producing pasta and pesto than Pestoland.
B. better at producing pasta, but relatively inefficient in producing pesto.
C. relatively better at producing pasta than pesto.
D. relatively better at producing pesto than pasta.
Answer: D
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The demand curve for a normal good shifts leftward if income ________ or the expected future price ________
A) decreases; falls B) decreases; rises C) increases; falls D) increases; rises
"Ceteris paribus" means
A) "invisible hand." B) "other things constant." C) "making all the necessary changes." D) "individual."
In practice, regulatory boards try to set the price of a natural monopoly so that price covers a normal return on capital investment. As a result:
A. there is an incentive to use more equipment. B. the price of equipment should decrease. C. there is an incentive to use less equipment. D. the incentive to use equipment stays the same.
People are not part of the labor force when they
A. Suffer from a temporary illness that keeps them away from their job. B. Go on vacation. C. Are old enough to work but choose not to work. D. None of the choices are correct.