Answer the following questions true (T) or false (F)
1. Consider a country that produces only two goods: parrots and iguanas. Suppose it is impossible for this country to increase its production of parrots without producing fewer iguanas. In this case, its current output combination is efficient.
2. Any output combination along a production possibilities frontier is associated with fully utilized resources.
3. A decrease in population shifts the production possibilities frontier outwards over time.
1. TRUE
2. TRUE
3. FALSE
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In 2015, Peelville consumed 30,000 bananas. In 2016, banana consumption rose to 35,000. Calculate the percentage change in banana consumption
A) 11.66% B) 14.28% C) 16.67% D) 22.25%
Market failures include all of the following EXCEPT
A) equalization of quantity supplied and quantity demanded. B) public goods. C) positive externalities. D) negative externalities.
Refer to the above graph. A successful advertising campaign by a monopolistically competitive firm will cause the demand curve for that firm to shift from:
A. A to B and become less elastic. B. B to A and become more elastic. C. A to B and become more elastic. D. B to A and become less elastic.
The prime interest rate:
A. affects investment spending while the federal funds rate affects consumption spending. B. affects consumption spending while the federal funds rate affects investment spending. C. has no effect on exchange rates and net exports. D. affects investment spending while the federal funds rate affects overnight borrowing of bank reserves.