Which of the following statements is an example of positive economic analysis?
A) The inflation rate is too high.
B) The government should worry less about inflation and more about unemployment.
C) If the government increases the rate of growth of the money supply, the inflation rate will increase, ceteris paribus.
D) The elderly live on a fixed income, so the government has an obligation to keep inflation rates low.
C
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Currently an economy is producing at a point on its production possibilities frontier for goods X and Y. It is producing 100 units of good X and the opportunity cost of producing 1X is 3Y. If good X is produced at increasing opportunity costs, then when the economy produces 120 units of good X (on the same PPF) the opportunity cost of producing 1X would be ______Y.
a) greater than 3 b) 2.5 c) 2 d) 1
Taxation of agricultural land at a lower rate than commercial property might be justified _____
a. on utilitarian grounds b. on the benefit principle c. on the ability-to-pay principle d. on efficiency grounds
Bankers' business decisions effect the money supply because bankers
a. are respected men and women. b. have the ability to create money. c. use a special accounting system developed by the Federal Reserve Board. d. All of the above are correct.
Economists believe that people who sit through bad music concerts likely do so because:
A. they do not ignore the sunk cost involved. B. they don't accurately consider what else they could be doing with their time. C. they undervalue the opportunity cost of their time. D. All of these are true.