Production possibilities frontiers are usually bowed outward. This is because
a. the more resources a society uses to produce one good, the fewer resources it has available to produce another good.
b. the opportunity cost of producing a good decreases as more and more of that good is produced.
c. of the effects of technological change.
d. resources are specialized; that is, some are better at producing particular goods rather than other goods.
d
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Something becomes money only if
A) people use it as a general medium of exchange. B) it is backed by another commodity, typically gold or silver bullion. C) the central government says it's money. D) it promises to pay the bearer a fixed quantity of a scarce metallic good.
Some economists claim that the Chilean experience during the 1990s was much more successful than its Latin American neighbors. Evaluate the Chilean policies during that decade
What will be an ideal response?
Compared with a 100% reserve system, fractional reserve banking
a) makes the economy more stable b) creates a greater risk of bank insolvency c) gives banks less control over the money supply d) makes the money multiplier smaller e) means that each dollar of currency is backed by a smaller amount of gold
Refer to the following graph. If the price is currently $1.80 then the firm is
a. losing money but should remain in operation.
b. losing money and should shut down to minimize losses.
c. breaking even when it produces 13 units.
d. earning an economic profit.