A PPF bows outward because
A) not all resources are equally productive in all activities.
B) consumers prefer about equal amounts of the different goods.
C) entrepreneurial talent is more abundant than human capital.
D) resources are used inefficiently.
A
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When you set aside the money you have today in order to purchase goods and services later on, you are using money as a
A) store of value. B) medium of exchange. C) standard of deferred payment. D) unit of accounting.
Suppose you have surveyed a few industries and obtained information about the income elasticity of demand for their products
If you expect that the economy is headed for a long recession, you would advise people to look for jobs in an industry with A) a "low" negative income elasticity coefficient such as -0.2. B) a high positive income elasticity coefficient such as 5. C) a low positive income elasticity coefficient such as 0.8. D) a "high" negative income elasticity coefficient such as -4.
Excess capacity and inefficiency result under monopolistic competition.
Answer the following statement true (T) or false (F)
Which of the following comparisons of efficiency and equity is correct?
a) Efficiency deals with the size of the economic pie and equity deals with how fairly the pie is sliced. b) Equity can be judged on positive grounds, whereas efficiency requires normative judgments. c) Efficiency is more difficult to evaluate than equity. d) Equity and efficiency are both maximized in a society when total surplus is maximized.