If a country produces good Y (measured on the vertical axis) and good X (measured on the horizontal axis), then the absolute value of the slope of its production possibility frontier is equal to
A) the opportunity cost of good X.
B) the price of good X divided by the price of good Y.
C) the price of good Y divided by the price of good X.
D) the opportunity cost of good Y.
E) the cost of capital (assuming that good Y is capital intensive) divided by the cost of labor.
A
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An open market sale of securities by the Fed
A) decreases banks' reserves and increases banks' securities. B) increases banks' reserves and decreases banks' securities. C) increases banks' total assets. D) involves a bank selling government securities to the Fed.
From the net tax function: T = t0 + t1Y, where t0 < 0 and t1 > 0, it follows that, as income rises
a. average taxes falls and the surplus declines. b. average taxes rises and the deficit increases. c. average taxes falls and the deficit declines. d. Average taxes and the deficit do not change.
Demand is (more elastic / less elastic) in the short run than in the long run
A. (less elastic) because goods account for a smaller percentage of the consumer's budget in the short run than in the long run. B. (less elastic) because consumers have less time to adapt to a price change in the short run than in the long run. C. (more elastic) because consumers have less time to adapt to a price change in the short run than in the long run. D. (more elastic) because goods account for a larger percentage of the consumer's budget in the short run than in the long run.
Which of the following is not shown on a product possibilities curve?
(A) The opportunity cost of a decision to produce more of one good or service. (B) All of the goods and services an economy has the ability to produce. (C) The efficiency of an economy. (D) Whether an economy has grown or shrunk.