Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs) for consumer goods and capital goods, but country 1 produces twice the output of both types of goods compared to country 2. It follows that
A) country 1's PPF lies further to the right than country 2's PPF.
B) country 1 has a smaller population than country 2.
C) country 1 has a bigger population than country 2.
D) country 1 is efficient and country 2 is inefficient.
E) none of the above
A
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When the SRAS curve slopes upward, the actual affect of an increase in real autonomous spending on equilibrium real GDP is smaller than predicted by the multiplier because
A) the price level rises B) the price level falls. C) real GDP increases. D) real GDP decreases.
The tables above show the marginal costs and benefits from production and consumption of paper. From this information we can see that there are
A) external costs of producing paper. B) external benefits of producing paper. C) no externalities in production of paper. D) external costs from consuming paper.
Suppose Chip's Chips produces bags of potato chips. An example of a fixed cost for this company would be:
A. the factory building. B. the deep fryer. C. a potato peeling machine. D. All of these are examples of fixed costs.
Suppose that a $4 per unit tax is imposed on the sellers of DVDs. The effect of the tax will be to
a. shift the supply curve up by exactly $4 and the price paid by buyers will remain unchanged.
b. shift the supply curve up by exactly $4 and the price paid by buyers will rise by less than $4.
c. shift the supply curve up by exactly $4 and the price received by sellers will rise by exactly $4.
d. shift the demand curve down by exactly $4 and the price paid by buyers will fall by exactly $4.