If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must
A) be using resources inefficiently today, but will be more efficient in the future.
B) be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods.
C) must be producing outside the production possibilities frontier and will continue to do so in the future.
D) must not have private ownership of property and will have to follow planning authorities' decisions today and in the future.
Answer: B) be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
When the price is P1, in order to maximize profits this firm must produce a quantity equal to 
A. q2. B. q1. C. q3. D. Q1.
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What will be an ideal response?
Elasticity of supply tells us
A. How much sellers will increase production in response to a change in price. B. How much producers will increase production with changes in consumers' income. C. How much supply responds to a change in quantity demanded. D. How much sellers will change their price as their quantity supplied changes.