"If Mexico is currently operating at a point beyond its production possibilities frontier, then there are unemployed resources in Mexico." Is this statement true or false? Briefly explain your answer
What will be an ideal response?
The statement is false. It is false on two counts. First, production points beyond the production possibilities frontier are unattainable, so it is not possible for Mexico to be producing at such a point. Second, points within not beyond the production possibilities frontier have unemployed resources.
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A small reduction in a country's growth rate is a concern to policy makers because
A) a small change can have large effects on per capita GDP over time. B) a reduction usually leads to future reductions until finally the economy stagnates. C) policy makers focus too much on economic growth and not enough on increasing savings rates. D) the larger GDP is the better the economic welfare will be in the future.
In the area of business, rent-seeking often involves
a. the use of resources to construct high-priced rental housing. b. the use of resources to secure and maintain a grant of monopoly power from the government. c. an agreement between firms to raise prices and limit entry. d. an agreement between a firm and a customer that makes both parties better off.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
The demand curve for a monopolist:
A.) Is steeper than the marginal revenue curve. B.) Lies below the marginal revenue curve at every point but the first. C.) Is the same as the marginal revenue curve. D.) Lies above the marginal revenue curve at every point but the first.