When Freddy read that the economy was growing and the production possibilities curve was shifting outward, he was excited. He thought everyone could have anything they wanted. Briefly explain why Freddy was wrong.
What will be an ideal response?
Growth, or an increase in a society’s output, does not make scarcity disappear. When output grows more rapidly than population, people are better off. But they still face trade-offs; at any point along the production possibilities curve, to get more of one thing, you must give up something else.
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A form of implicit collusion in which one firm consistently follows the actions of another firm is:
A) predatory pricing. B) a Webb-Pomerene association. C) parallel conduct. D) only illegal in Europe.
If consumers were originally willing to buy 500 units of a good at a price of $20 are now willing to buy 500 units of the same good at a price of $10, that change would be described as a decrease in demand
a. True b. False Indicate whether the statement is true or false
If the price elasticity of demand for a good is 3.0, it is clear that the good
a. would be a poor choice to tax if the object is to raise tax revenue b. would be an excellent choice to tax if the object is to raise revenue c. is an essential good d. has a demand curve that is price inelastic at every price level e. is a complementary good
Programs that reduce the incentive to work make income redistribution inefficient.
Answer the following statement true (T) or false (F)