The figure above shows a production possibilities frontier. In the figure, when the economy moves from point E to point D, what is the opportunity cost of a DVD?
A) 0.25 cell phones
B) 0.5 cell phones
C) 1 cell phone
D) 4 cell phones
E) zero
A
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If people become pessimistic about the state of the economy, the consumption function shifts upward
a. True b. False Indicate whether the statement is true or false
Great Britain opted out of the ERM in 1992 because its government concluded that:
A) it wanted to increase its trade with North America rather than Europe. B) the gains from being a member of the ERM outweighed the costs from higher German interest rates. C) the costs associated with higher German interest rates outweighed the gains from being a member of the ERM. D) it was unable to agree with the French on an exchange rate between the pound and the French franc.
Which of the following is an example of internalizing an externality?
A) a paper mill that spends money removing the pollution it generated B) a neighbor leaving lots of trash in his front yard C) a student receives $15 for each bright question asked during lecture D) Both A and C.
In the marginal productivity theory of income distribution, when all markets are purely competitive, the payment for each unit of a resource is equal to its:
A. Total product B. Marginal product C. Marginal revenue product D. Total revenue product