A normal production possibilities frontier has a
A. positive slope and is steeper near the horizontal axis than near the vertical axis.
B. negative slope and is steeper near the horizontal axis than near the vertical axis.
C. positive slope and is steeper near the vertical axis than near the horizontal axis.
D. negative slope and is steeper near the vertical axis than near the horizontal axis.
E. zero slope, and it does not touch the horizontal axis.
Answer: B
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The government budget constraint implies that
A) government borrowings = government spending+ transfers - taxes and user charges. B) government borrowings = taxes and user charges + government spending - transfers C) government spending = transfers - taxes and user charges - government borrowing. D) government spending = government borrowing - transfers - taxes and user charges
If interest rates in Canada rise above those in the rest of the world, then
a. the demand for Canadian dollars decreases b. exports from Canada to other countries increases c. imports into Canada from other countries decreases d. it raises Canada's exchange rate and this may result in a deficit on Canada's current account e. the balance of payments becomes negative
A competitive price-searcher firm is currently producing 10 units of output. At this level of output the firm is charging a price equal to $10, has marginal revenue equal to $6, has marginal cost equal to $6, and has average total cost equal to $12 . From this information we can conclude that
a. the firm is currently maximizing its profit. b. the profits of the firm are positive. c. firms are likely to enter this market in the long run. d. the firm would earn more profit by expanding output
Studies have concluded that NAFTA caused ________ in economic welfare to Canada.
a. a gain b. a loss c. no change d. first a gain, then a loss