If production involves increasing opportunity cost, then on the production possibilities frontier, moving to a point closer to the horizontal axis will increase the opportunity cost of
A. the good that is shown on the horizontal axis.
B. the good that is shown on the vertical axis.
C. both of the goods shown on the axes.
D. neither of the goods shown on the axes.
Answer: A
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
Unemployment occurs when someone:
A. is not working full-time. B. wants to work but cannot find a job. C. should be working but chooses not to. D. has useful skills that are not being used.
Absolute advantage is
A. the ability to produce more output from given inputs than another producer can. B. the ability to produce a good at a lower opportunity cost than other producers. C. the ability to produce all goods at lower costs than anyone else can. D. is always a relative concept.
If average total cost is $50 and average fixed cost is $15 when output is 20 units, then the firm's total variable cost at that level of output is
A) $1,000. B) $700. C) $300. D) impossible to determine without additional information.