Prohibiting price increases in situations of true scarcity
a. prevents the market mechanism from reallocating resources more efficiently.
b. discourages production.
c. may lead to extreme shortages of vitally needed products.
d. All of the above are correct.
d
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Under perfect capital mobility, fiscal policy has the largest impact on the income under:
a. fixed exchange rates. b. floating exchange rates. c. dollarization. d. a currency union.
In the 1990s, many people had rising incomes. At the same time, there was a rise in the cost of lumber. This would cause the demand for houses to _________ and the supply for houses to_________
a. Increase, increase b. Increase, decrease c. Decrease, increase d. Decrease, decrease
A key assumption of David Ricardo's economic rent concept was that
A. all land is equally productive. B. land is always cheap and needs development. C. land is too differentiated to be able to measure. D. only land in large cities matters.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point B to Point A is
A. -2/3. B. -3/4. C. -1.5. D. -20.